What is a Health Savings Account (HSA)?
It’s open enrollment time at many companies. Does your company offer a High Deductible Health Plan (HDHP)? If so, have you ever considered a Health Savings Account to help you pay for your out of pocket medical expenses?
A Health Savings Account (HSA) is similar to a Flexible Spending Account (FSA) in that it allows you to put aside pre-tax funds for qualified medical expenses. An HSA is exempt from taxes including federal income tax, FICA and (often) state income taxes.
The HSA 101
You must be enrolled in a qualifed HDHP to have an HSA
Most accounts earn interest on savings
Your employer or family members can contribute to your HSA
Can be used for deductibles, co-pays and co-insurance
Can be used for over-the-counter products and medicines (require a prescription)
HSA money rolls over year to year
You may contribute up to the allowed maximum, adjusted for inflation each year
- 2013: $3,250 per person; $6,450 per family
- 2014: $3,300 per person; $6,550 per family
If you're 55 or older, you may contribute an additional $1,000.
How is an HSA different from the FSA?
HSA funds roll over whereas with an FSA your contributions much be used by end of year – or they are forfeited. You own the HSA so even if you change jobs or are no longer covered under an HSA-eligible HDHP, you can keep spending down your HSA or save it for future expenses.
Can I use an HSA at FSAstore.com?
Absolutely! Products that are eligible for FSAs are also HSA-eligible.