Health Savings Accounts | 2017
Is a Health Savings Account (HSA) right for you?
As we all search for ways to lower our health care costs, you may want to consider enrolling in a high-deductible health insurance policy and pairing it with a Health Savings Account. When shopping for health policies in the Tennessee Health Insurance Marketplace you can choose from many HSA qualified plans. You can fund the HSA with the money you save on premiums since the high-deductible plans are usually less expensive. The HSA gives you a triple tax break: Your contributions are sheltered from income taxes, the money grows tax-deferred, and the funds can be withdrawn tax-free for qualified medical expenses. It's like a supercharged flexible spending account that never expires, and it can even serve as an extra retirement-savings fund. Below we answer your questions about how HSAs work and how to make the most of them.
What is an Health Savings Account?
The simple answer is that an HSA is a checking account designed to pay for qualified medical, dental and vision expenses with tax-free dollars. The account is not tied to your employer, nor is the money. You and/or your employer deposit tax-deductible dollars into your account, and you spend them on qualified expenses, tax free. Your HSA is not tied to the insurance company you choose, the only requirement is that you have a qualified health plan.
How do I qualify for an HSA?
You need a high-deductible health insurance policy (HDHP), whether it's through an employer or on your own. There are many HDHPs available in the Tn Marketplace. In 2017, your deductible must be at least $1,300 for individual coverage or $2,600 for family coverage.The key is that you cannot have any first-dollar benefits (such as doctor or prescription co-pays). Preventative care and prescriptions are allowed, but everything else must be applied to your deductible.
How much can I contribute?
You can make pretax contributions (or tax-deductible contributions, if you're on your own) in 2017 of up to $3,400 a year if you have individual coverage, or up to $6,750 if you have family coverage. People age 55 and older can save an extra $1,000 per year. You can add money to the account until the tax-filing deadline”April 15, 2017, for 2016 contributions.
How can I use the money?
You may spend the HSA money tax-free on out-of-pocket medical expenses, such as your deductible, co-payments for medical care and prescription drugs, or bills not covered by insurance, such as vision and dental care. Most plans provide a debit card and an online bill-payment option. If you don't spend all the money each year, the balance rolls over as long as you keep it in your account. Download a list of eligible expenses.
Sign up today! Opening a Health Savings Account is easy to do and gives you the opportunity to pay for qualified expenses with tax-free dollars.
Need help or have questions about setting up your HSA? Give us a call, we are here to help. 615-724-1701.