by Fred Adams
Vice President
HSA for America

About Health Savings Accounts

A Health Savings Account (HSA) is a tax-exempt trust or custodial account that offers individuals and families a tax-free way to pay for current health care expenses and save for future qualified medical and retiree health expenses.  You may use any remaining account balances to supplement your retirement income.

HSAs were created to go hand-in-hand with a qualified high-deductible health insurance plan so that individuals and families can pay less in insurance premiums and put the savings (along with additional funds) in a tax-exempt HSA.

First, you must have a high-deductible health insurance policy that qualifies to be partnered with an HSA.  These plans are available through various insurance companies, depending upon what part of the country you live. The plans are all similar in the fact that they have deductibles ranging between $1,050 and $5,200 per year for individuals, and between $2,100 and $10,500 for families.

Once the insurance policy has become effective, you may fund an HSA account.  These accounts allows you to legally avoid federal income tax by putting 100% of the health plan's deductible, up to $2,700 for singles or $5,450 for families, into your HSA account.

Even though you have received a tax-deduction by putting your money into this account, the money is still yours to spend tax-free, as long as you spend it on qualified medical expenses.  Since you have a high-deductible plan, this would of course include any expenses incurred from going to the doctor, purchasing prescription drugs, or paying other expenses toward your plan's deductible.

In addition to being able to withdraw money tax-free to cover these types of expenses (which might not otherwise be covered by a traditional low-deductible high-premium policy), you can use the HSA account to cover costs that would not normally be covered by a health insurance policy, such as alternative medical treatment, orthodontia, or non-prescription medications.

More information about how HSAs work, along with instant quotes on qualifying high-deductible health plans, can be found at:

HSA for America

HSA for America
749 S. Lemay Ave, Suite A3-116
Fort Collins, CO 80524
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