Managing Healthcare Expenses with an HSA
You never know when an injury or illness may strike, and the last thing you want to have to worry about is how you are going to pay for your medical expenses. With an HSA, you will be better prepared for unexpected health issues that may arise.
What is a Health Savings Account (HSA)?
A Health Savings Account (HSA) is a tax-advantaged account used for qualified medical expenses for individuals that are part of a high deductible healthcare plan (HDHP). Qualified medical expenses include medical, dental, vision and prescription drugs. Contributions to an HSA are made by the individual or their employer and are limited to a maximum amount set by the IRS each year. The maximum contribution for an individual in 2023 is $3,850 and for a family is $7,750. Individuals age 55 or older by the end of the tax year can make catch-up contributions of an additional $1,000.
How does an HSA work and why is it beneficial?
Funds deposited into an HSA are not taxed, the balance grows tax-free and the amount is available on a tax-free basis to pay medicals costs. Unused funds and interest are carried over from year to year and your funds will accumulate without a maximum cap. An HSA is portable in the event that you have an employment change or retire. It can eventually be additional retirement support since your HSA funds can be invested and used for expenses other than qualified medical expenses without penalty once retired.
- Must participate in a HDHP
- Have no other insurance coverage other than those specifically allowed
- Not enrolled in Medicare
- Not claimed as a dependent on someone else’s tax return
Having an HSA allows you to actively participate in and take control of your own healthcare, manage rising healthcare costs and enjoy the triple tax advantage that having traditional insurance coverage lacks. In addition, it provides you with an additional account to add into your retirement mix.
Don’t miss out on this opportunity to take control of your healthcare costs and secure your future. Open an HSA today and start building a financial safety net that will be there when you need it most.
Contact us now to get started on your HSA journey. Your health and financial well-being are too important to leave to chance. Act now and experience the peace of mind that comes with being prepared for the unexpected.
*Consult your tax professional about HSA tax details.