Health savings account

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Health Savings Account

A form of health insurance in which a policyholder makes tax-free contributions to a special account that can be used for present and future medical expenses. Health savings accounts may be purchased individually or through an employer, but, in order to qualify for one, a policyholder must have an insurance policy with a high deductible. A health savings account may be used in order to offset the high deductible on one's other insurance policy. One does not pay taxes on withdrawals from a health savings account, unless one withdraws funds for a non-medical reason, in which case there may also be a penalty, depending on the age of the policyholder.

Health savings account (HSA).

A health savings account is designed to accumulate tax-free assets to pay current and future healthcare expenses. To open an HSA, you must have a qualifying high deductible health plan (HDHP) either through your employer or as an individual.

If you have an employer's plan, your contributions to the HSA are made with pretax income, and your employer may contribute as well. If you have an individual plan, you may deduct your contributions in calculating your adjusted gross income (AGI).

Congress sets an annual limit on the amount you can contribute to an HSA, which you set up with a financial institution such as a bank, brokerage firm, insurance company, or mutual fund company that offers these accounts.

No tax is due on money you withdraw from the HSA to pay qualified medical expenses such as doctor's visits, hospital care, eyeglasses, dental care, and medications for yourself, your spouse, and your dependants.

Any money that's left over in your HSA at the end of the year is rolled over and continues to accumulate tax-free earnings, which you can use for future healthcare costs.

Once you're 65, you can use the money in the HSA for non-medical expenses without paying a penalty, but you'll owe income taxes on those withdrawals. If you are younger than 65, you can also spend from your HSA on non-medical expenses, but you'll owe income taxes plus a 10% tax penalty on the amount you take out.

References in periodicals archive ?
Employers: The Employers section highlights the five-step process to begin working with HSA Bank and includes information that employers will find useful to setup and facilitate their HSA program.
HSA is a trading division of Simplyhealth Access and is a provider of Healthplans including Health Cash Plans, Dental Plans and Private Medical Insurance
The main difference between an HRA and an HSA is that an HSA is portable, following an employee from job to job; HRA funds generally remain with employers as an employee retention device.
Jack Lewin, chief executive officer of the California Medical Association, is in the process of signing up for an HSA.
Employers can contribute to the HSA based on employee participation in health-improvement activities such as in wellness or disease-management programs.
H is an eligible individual and may contribute up to $5,000 to an HSA.
HSAs help employees save money by allowing them to use pretax dollars to pay for expenses that aren t covered by their health insurance plans, like copayments for doctor s visits and prescriptions, as well as dental and vision costs, said Elizabeth Ryan, executive vice president and head of Health Benefit Services for Wells Fargo.
Glossner also serves as the chair of the HSA Domain Specific Processor working group (HDP).
In many respects, an HSA resembles an Individual Retirement Account (IRA).
Blackburn Rovers' sponsor, HSA, is one of the UK's leading providers of health plans.
An HSA plan features two components: a high-deductible health plan, or HDHP, and a health savings account.