Health Insurance Values » Ways to save
Banking on an HSA
Used in combination with a high-deductible health plan, an HSA allows you to save pre-tax income — and earn interest on it.
Your HSA funds may be used to cover qualified health care expenses tax-free. And unlike use-it-or-lose-it health care spending accounts, your contributions carry over from year to year. Plus, your HSA is completely portable; it stays with you despite job changes, relocation or unemployment.
An HSA account may be accessed at any time or left untouched to provide a nest egg for future medical costs or for taxable retirement income.
Why choose an HSA?
Switching to an HSA and health insurance with a higher deductible can help you lower your health insurance premiums. Additionally, it can help protect you financially from high or unexpected medical bills. HSA funds may even cover medical expenses your regular insurance doesn’t.
Who can have an HSA?
Anyone who is 18 to 64 years old, cannot be claimed as a dependent on someone else’s tax return, is not enrolled in Medicare and is insured by a qualified high-deductible health plan (HDHP), may set up and contribute to an HSA.
For 2009, the minimum deductible for a qualified HDHP increased to $1,150 for self-only coverage and $2,300 for family coverage.
What does an HSA cost?
You do not purchase an HSA; you deposit money into it on a tax-preferred basis. However, you must purchase an HDHP to use with your HSA. Note that HSA trustees often charge a fee for their service.
Who contributes to my HSA?
Anyone can deposit money into your HSA, including but not limited to family members and employers. Keep in mind that there is an annual contribution limit. You can deduct your own contributions on your federal income tax return.
How much can I contribute to my HSA?
For 2009, the maximum annual HSA contribution for eligible individuals covering only themselves is $3,000, and for family coverage the maximum annual HSA contribution is $5,950. The catch-up contribution for individuals 55 and older is increased by statute to $1,000 for 2009 and all years going forward.
Can I invest my HSA dollars?
Yes. Plans may vary, but all HSAs have the same investment options and limitations as IRAs.
Where can I get an HSA?
Contact your insurance company, an agent or broker licensed in your state, your state insurance department or get a free online quote on an HSA-qualified high-deductible health plan.
Additional HSA resources
The Department of the Treasury
Freedom HSATM
HealthLog 
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