A Health Savings Account (HSA) is a portable savings account that allows you to set aside money for health care tax-free.

 

You must have a high deductible health insurance plan to be able to take advantage of HSAs.  The minimum deductible to qualify is $1100 for individuals and $2200 for families. High deductible health plans usually cost less than traditional health care insurance, so the money that you save on insurance can therefore be put into your Health Savings Account.

 

Money in an HSA rolls over from year to year (there is no “use it or lose it”). Your HSA is owned by you, not your employer, and you control the money in your HSA. You decide how to spend the money and what types of investments to make with the money in the account in order to make it grow. Many people compare an HSA to a “medical IRA”.

 

Contributions to HSAs by individuals are tax deductible, even if the taxpayer does not itemize. Contributions by an employer are not included in the individual's taxable income. Individuals, their employers, or both can contribute tax-deductible funds each year up to the amount of the policy's annual deductible, subject to a cap of $2,850 for individuals and $5,650 for families. In addition, individuals over age 55 can make extra contributions to their accounts of up to $800 and still enjoy the same tax advantages.

 

HSA funds can be used to cover the health insurance deductible and any co-payments for medical services, prescriptions, or products. In addition, HSA funds can be used to purchase over-the-counter drugs and long-term care insurance, and to pay health insurance premiums during any period of unemployment. The interest and investment earnings generated by the account are not taxable while in the HSA. Amounts distributed are not taxable as long as they are used to pay for qualified medical expenses.

 

HSA: Helping Control Healthcare Costs Brochure

 

Call your Credit Union representative at 800.873.5100, 561.982.4700, or email us at serviceplus@ibmsecu.org to open your HSA or for more information.

 

 

*$25 will be deposited into your Membership Savings Account within 30 days of the opening of the Health Savings Account. If your HSA is closed within the first 90 days, the Credit Union reserves the right to revoke the $25 promotional credit. Promotion valid as of February 8, 2008; subject to change without notice.