Having options never hurt anybody. If you have a high-deductible health plan, you may be eligible to contribute to a Health Savings Account—a flexible, tax-free way to save for medical expenses.
If you have a high-deductible health plan (HDHP), you may be eligible for a Health Savings Account (HSA)—a flexible, tax-free way to save for medical expenses. Besides helping to provide peace of mind,
HSAs offer many advantages.
HSAs allow you to make contributions and earn interest tax free. Plus, your distributions (the assets withdrawn) are also tax free as long as they're used for qualified medical expenses.
You can use the money in your HSA to pay for—or reimburse—qualified medical expenses for you and your family members. Those expenses could include health insurance deductibles, co-payments, certain over-the-counter medications and out-of-pocket expenses.
You've heard the phrase, "use it or lose it." Well, an HSA isn't like that at all. HSA balances carry forward year after year, allowing you to budget for health expenses and build up your savings to cover qualified medical expenses when the need arises.
An HSA is owned by you, not your employer. So, it's your responsibility to maintain. Ask us for more details.
Unlike Archer Medical Savings Accounts, HSAs are available to everyone, not just the employees of small businesses and the self-employed.
Although this is an individual account and goes with you from career to career, your employer may choose to make contributions to your HSA as an added benefit to you.
The annual contribution limit is based on the type of HDHP coverage. For 2014, the limit increases to $3,300 for self-only coverage and $6,550 for family coverage. These limits are subject to annual cost-of-living adjustments (COLAs).
Individuals who are age 55 or older by the end of the taxable year and not enrolled in Medicare may make additional contributions up to $1,000 per year.
You must maintain a minimum daily balance of $2,500.00 to waive the $2.50 monthly maintenance fee on the Business Health Savings account.
This page is intended to provide general information on federal tax laws governing HSAs. It is not intended to provide legal advice or to be a detailed explanation of the rules or how such rules may apply to your individual circumstances or under your state tax laws.
For specific information, you are encouraged to consult your tax or legal professional. IRS Publication 969, Health Savings Accounts and Other Tax- Favored Health Plans, the instructions to IRS Form 8889 and the IRS's web site, www.irs.gov, may also provide helpful information.
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