HEALTH SAVINGS ACCOUNT
A Health Savings Account (HSA) is an alternative to traditional health insurance. It's a savings product that allows you to pay for current out-of-pocket health expenses and save for future medical and retiree health expenses. It's funded with pretax dollars and grows tax free.
To qualify, you must be covered solely by a health insurance policy that's deemed a high deductible health plan. You may not be covered under another health care plan, other than your high deductible plan or be eligible for Medicare to have an HSA.
Withdrawals are not taxed as long as they're used for qualified health-care expenses. Unlike an employer's flexible spending account that enforces a "use it or lose it" rule, you can carry over money saved in an HSA from year to year.
With an HSA, you are responsible for determining whether your health care plan is a high deductible plan and your allowable annual contributions. You will also be responsible for determining if you have qualified medical expenses eligible for reimbursement.
Contact your tax advisor with questions on specific tax details regarding an HSA and taxes.
If you want to supplement your retirement income, or simply save more to cover health-care costs, set up an HSA at North Star Community Credit Union.
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