Many people are confused by the term ‘Health Savings Account’ or HSA, and so they ignore this opportunity to save money. The product is not that complicated when it’s explained in simple terms.
According to www.healthcare.gov, when you open an HSA, the money you deposit into it is not taxed. You can use it to pay medical expenses before your health plan’s deductible is met.
HSA rules and benefits
David Kreider, our tax Insider from H & R Block in Green Valley, told us what you need to know about Health Savings Accounts:
- Only people with high-deductible insurance plans are eligible to open an HSA.
- ‘High deductible plans’ have deductibles of at least $1,300 for individuals and $2,600 for families.
- Total annual out-of-pocket expenses cannot exceed $6,550 for individuals and $13,100 for families (excluding out-of-network expenses).
- Money deposited into an HSA is not taxed.
- An HSA can be opened at any bank.
What expenses can you include?
The list of expenses you can pay with your HSA is extensive. In addition to typical doctor and hospital visits and treatments, you can use your HSA to pay for acupuncture and chiropractor charges, costs associated with breast feeding such as pumps and supplies, Braille materials and guide dog expenses, as well as the cost of making your home accessible if you or a family member is disabled.
For help understanding HSAs, contact H & R Block at 520-625-8732.