What is an HSA?
HSAs are available for people with a qualified high deductible health plan. Learn more about the basics of an HSA to see if it’s the right solution for you!
What’s the Difference Between an HSA and FSA?
The largest difference between a Flexible Spending Account (FSA) and a Health Savings Account (HSA) is an individual controls an HSA and funds roll over from year to year, while an employer owns the FSA and funds must be used in the plan year or an individual loses them.
Four Reasons to Choose an HSA
They’re cutting edge and popular with millennials. Many employers have moved to consumer directed health plans, and a portion of our nation’s young adults are opting for the higher deductible plans.
- They are affordable, portable and have great tax advantages. There are contribution limits depending on your insurance coverage level.
The limits for 2022 are:
- Individual: $3,650
- Family: $7,300
- Catch-up Contribution (55+): $1,000
High Deductible Health Plan minimum:
- Individual: $1,400
- Family: $2,800
- Individual: $7,050
- Family: $14,100
- They increase engagement and control. You can manage your money and have more control over how and when to spend it.
They are an IRA in disguise and have a Triple Tax Advantage. You can contribute to your HSA and accrue interest just as you would in an Individual Retirement Account (IRA). In fact, funds from an existing IRA can even be rolled over into an HSA. HSAs are also popular for their triple-tax advantage:
- Account contributions are pre-tax or tax-deductible
- All earnings, interest, and investment returns are tax free
- Spending is tax-free when used for qualified medical expenses
How Can You Use Funds in the HSA?
The Internal Revenue Service (IRS) identifies the types of medical products and services that qualify. Types of eligible medical expenses include services for medical, dental, and vision as well as many over-the-counter medicines and products.
Ready to Enroll in a Health Savings Account?
If your employer offers HSAs through HSA Central, contact them before enrolling. This ensures you’re enrolled under the correct employer group.
Consult a tax advisor