Health Savings Accounts

A Health Savings Account or HSA is an individually owned account which allows individuals to save and pay for qualified medical expenses on a tax-advantaged basis.  The funds in the account may be used to pay for the qualified medical expense either now or in the future.  The funding of the account may come from an employer or be funded by the employee/ individual.  The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 signed into law by President George W. Bush in December of that year is what allows eligible individuals to establish a Health Savings Account.  Some have compared a Health Savings Account to a 401(k) for your personal healthcare.

The benefits of a Health Savings account are numerous:

»   Triple Tax Savings
___»   Pre tax or tax deductible contributions to the account
___»   Tax free interest or investment earnings
___»   Tax free distributions for qualified medical expense
»    Ability to let funds accumulate from year to year
»    Control over how much to put into the account-within the  ____limits set by the IRS
»    You decide which qualified medical expenses, if any you ____want to pay for from your account.  You may decide to ____accumulate the funds for future health care expenses.

Basic eligibility rules for opening a Health Savings Account:

»
You must be enrolled in a qualified High Deductible Health Plan (HDHP)
»
You can not be covered by any other health insurance - this does not include specific disease or illness, accident, disability, dental, vision and long term care insurance.
»
You can not be enrolled in Medicare, Medicaid, or Tricare
»
You can not have received Veterans Administration health benefits in the last three months
»
You may not set up an HSA for minors.

To learn more about the specific rules and regulations for establishing a Health Savings Account feel free to contact our office at the number below or access the HSA Resource box in the upper right side of this web page.

Have a Question? Feel free to call us at 405. 720.0333

HSA Resources

arrow image  HSA Bank
arrow image  IRS Publication 969 
arrow image  IRS Publication 502 
(Medical & Dental Expenses)