A Health Savings Account allows individuals to pay for current health expenses and save for future qualified medical expenses on a pre-tax basis.
Funds deposited into an HSA are not taxed, the balance in the HSA grows tax free, and that amount is available on a tax free basis to pay medical costs. Your voluntary contributions to your HSA reduce your taxable income.
An HSA plan may save you money through lower health insurance premiums, tax savings, and money deposited in your account which can be used to pay your medical deductible and other out-of-pocket medical expenses in the current year or in the future.
Generally qualified medical expenses will be determined by the plan in conformance with FEHB law and Section 213. See IRS Publication 502 for a list of qualified medical expenses. Please note some insurance premiums cannot be paid for by HSA funds.
First, you must elect a high deductible health plan. Generally, once the plan receives your enrollment, the plan will mail you an information packet which includes forms for you to complete and return to the plan. When the plan receives the completed forms, the plan will notify its administrator of the HSA election. The HSA administrator will then set up your account and your health plan will deposit "premium pass through" payments into the account.
Other options are available as well. Contact your bank and see if they offer the HSA account
HSA holders can choose to save up to $3,500 for an individual and $7,000 for a family (HSA holders 55 and older get to save an extra $1,000 which means $4,500 for an individual and $9,000 for a family) – and these contributions are 100% tax deductible from gross income (for year 2019)
Learn more about HSA - Health Savings Accounts by watching this presentation:
Are there any HSA fees?
Here are the fees charged by the HSA Bank. For details regarding the general terms and conditions that apply to your HSA, see the Deposit Account Agreement and Disclosures for Health Savings Accounts.
Service Fees - HSA Service Fee $2.50
How to Avoid Fee? Maintain an average HSA Bank cash account daily balance at or above $3,000.
2 Printed HSA Account Summary Fee $1.50
How to Avoid Fee? Elect to receive free e-statements through the Member Website.
HSA Closure Fee $25.00 If you lose your high-deductible health plan (HDHP) coverage, you can continue to use your HSA funds for eligible expenses.