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HSAs are individual accounts which allow you to make
contributions to pay for future medical expenses. You will
be able to deduct your contributions to your HSA, and the account
earnings will accumulate on a tax-deferred basis. Distributions
from your HSA are tax-free if they are used for qualified medical
expenses. Any unused funds remain in the account, so there’s
no “use it or lose it” stipulation. You may choose from
a regular HSA Savings account or a variety of HSA Certificate Accounts.
Click here for current rates.
Eligibility
You are eligible to contribute to a Health Savings
Account if you are:
- Covered by a qualified high-deductible health
plan (HDHP)
- Not covered by other health plans which do not
qualify as an HDHP
- Not enrolled in Medicare
- Not claimed as a dependent on someone else’s
tax return
HSAs are designed for individuals who have chosen
a high-deductible health plan (HDHP). A qualified HDHP has a minimum
deductible of $1,100 (individual coverage) or $2,200 (family coverage)
and a maximum out-of-pocket expense of $5,500 (individual) and $11,000
(family) during 2007. If you are not sure if your health plan qualifies
for an HSA, ask your insurance provider.
Your eligibility to contribute to an HSA is determined
on the first day of every month. If you meet the eligibility
test on that day, you can contribute for that month.
Contributions
Once you open an HSA, you may contribute up to $2,850
per individual and $5,650 per family during 2007. Individuals or
employers can contribute to an HSA at any time throughout the year
up to the applicable contribution limit. And if you’re
age 55 and older, you can make additional “catch-up”
contributions.
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