HEALTH SAVINGS
ACCOUNT
WHAT IS A HEALTH SAVINGS
ACCOUNT?
A Health Savings Account (HSA) is a savings account established
exclusively to pay for medical expenses of an individual or family
who has contributed to the account while enrolled and covered under
a high-deductable health plan.
WHAT IS A HIGH-DEDUCTIBLE HEALTH PLAN?
A health plan is a high deductible health plan when certain
requirements in terms of annual deductibles and annual
out-of-pocket maximums are met.
The annual deductible requirement for an individual is at least
$1000 and an out-of-pocket expense maximum that does not exceed
$5000.
The annual deductible requirement for a family is at least $2000
and an out-of-pocket expense maximum that does not exceed
$10,000.
OUT-OF-POCKET EXPENSES INCLUDE:
*DEDUCTIBLES--the amount you pay for your health
care each year before your insurance planbegins to pay
*COPAYMENT--a specific dollar amount of a
covered service that you pay at the time of the service is rendered
(for example, prescription drug co-pays)
*COINSURANCE--the percentage of a covered
service that you pay
WHY HAVE A HEALTH SAVINGS ACCOUNT?
The Health Savings Account (HSA) provides a way to fund your health
care expenses nowand in the fiture and to save for long-term care
expenses. When the funds are used for these eligible health care
expenses, the savings may be tax exempt.
The high-deductible health plans are provided by health insurance
companies. The HSA is administered by a financial institution. You
may choose any financial insutitution that is qualified to provide
this service. We advise you to consult with your tax advisor for
assistance in setting up your HSA.
WHAT IS THE ADVANTAGE OF AN HSA
Your high-deductible health plan works in conjunction with your
HSA. The plan provides benefits for covered medical services once
applicable deductibles are satisfied. The funds you deposit in your
HSA can be used to pay for medical expenses applied to your
deductible.
Some medical expenses not covered by the HDHP may still qualify for
funding from your HSA without tax penalty. Please refer to 213d of
the IRS Code for information regarding what medical expenses can be
covered by your HSA.
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