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How Health Savings Accounts Work
A Health Savings Account is a tax-favored savings account combined with a qualifying HSA insurance plan. By allowing you to deposit tax-deductible funds into a savings account that you can use to cover medical costs, Health Savings Accounts enable you to take control of your own health care decisions.
First you must have a high-deductible health insurance plan that qualifies to be partnered with an HSA. These plans are available through various insurance companies, depending in what part of the country you live.
For 2019, HSA plans annual deductibles remain unchanged at $1,350 for individual coverage or at least $2,700 for family coverage. Annual out-of-pocket expenses (including deductibles and copayments, but not premiums) are capped at $6,750 for individuals or $13,500 for families.
For 2020, HSA plans annual deductibles for individuals will be $1,400 and $2,800 for families. Annual out-of-pocket expenses (including deductibles and copayments, but not premiums) are capped at $6,900 for individuals or $13,800 for families.
All HSA plans and some non-HSA plans have an aggregate deductible rather than an embedded deductible. With an aggregate deductible, one or all family members contribute and work towards meeting a single deductible. Family plans with embedded deductibles have individual deductibles each individual member works towards or a family deductible that all family members works towards.
You have until April 15, 2020 to make the full 2019 allowable contribution to your HSA and claim it on your 2019 tax return.
Once your insurance policy has become effective, you may fund your HSA account. You can establish your HSA with any bank or HSA administrator. Click here to see a list of banks we recommend.
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