The ABC's of HSA's

There has been a lot of talk about Health Savings Accounts lately. Many consumers may be confused by these high-deductible health insurance plans coupled with IRA-style savings accounts. In reality, they're pretty simple and getting more and more popular.

 

An HSA program has two parts, an eligible, high-deductible health insurance plan and a tax-advantaged savings account. For an individual, an HSA-compatible health insurance plan must have an annual deductible of at least $1,000.

 

The second part of an HSA program is an IRA-style savings account that allows you to reduce your taxable income by building savings. You can deposit funds up to the total of your health plan's annual deductible into the HSA-account each year.

 

Funds placed into your HSA can be invested to earn tax-free income and the balance will roll over from year to year until retirement age. But, unlike an IRA, you can use your HSA funds to cover medical expenses without penalty. eHealthInsurance has even provided an HSA Calculator designed to show you the value of an HSA program.

 

If you're looking for a way to maximize you tax savings while reaping the benefits of a quality health plan, look no further than HSA-compatible health plans. To maximize your savings, consult a tax advisor and visit eHealthInsurance.com for free online quotes, today!