HEALTH EQUITY HSA
Save Now and For the Future with Health Equity
An HSA, or Health Savings Account, is a unique tax-advantaged account that can be used to pay for current or future healthcare expenses. When combined with a high-deductible health plan, it offers savings and tax advantages that a traditional health plan can’t duplicate. With an HSA, employees will have:
1) A tax-advantaged saving account that they can use to pay for eligible medical expenses as well as deductible, co-insurance, prescriptions, vision, and dental care.
2) Unused funds that will roll over year to year. There’s no “use it or lose it” penalty.
3) Potential to build more savings through investing. Employees can choose from a variety of HSA self-directed investment options with no minimum balance required.
4) Additional retirement savings. After age 65, funds can be withdrawn for any purpose without penalty but may be subject to income tax if not used for qualified medical expenses.
For more information about Health Savings Accounts with Health Equity, click here.
A Health Savings Account (HSA) is like a 401(k) for healthcare. It is a tax-advantaged personal savings or investment account that individuals can use to save and pay for qualified healthcare expenses now or in the future. Paired with a qualified high deductible health plan (HDHP), an HSA is a powerful financial tool that empowers consumers to be more actively involved in their healthcare decisions.
However, unlike other financial savings vehicles (Roth IRA, Traditional IRA, 401K, etc.), an HSA has the unique potentital to offer triple tax savings through:
– Pre-tax or tax-deductible contributions to the HSA
– Tax-free interest or investment earnings
– Tax-free distributions, when used for qualified medical expenses
Contributions can be made by the employer, the employee/individual, or both. Tax-free withdrawals can be made to pay for qualified healthcare expenses incurred by the account holder, spouse, children and other dependents.
HSAs are also portable, which means that individuals keep their HSAs, if changing jobs or becoming unemployed. Also, since the account is owned by the individual, there is no “use-it-or-lose-it” provision, as with Flexible Spending Account (FSA). Instead, unused contributions roll over each year, with interest and/or investment earnings compounding on a tax-free basis, like an IRA or 401(k). HSAs offer the potential for long-term, tax-free savings that can be used for future healthcare expenses, such as Medicare premiums and certain long-term care expenses and insurance.
Any adult who is not already enrolled in Medicare and is covered by an HDHP (and has no other first dollar coverage except for preventative care) may establish an HSA. There are no income limitations.
If you do not want to use HSA Bank, you can apply for an HSA account at your local bank.
For information about Health Savings Accounts, contact Lori Fennessey at (970) 476-6585 or lori@lfinsurancegroup.com.