What is a health savings account (HSA)?
According to HealthCare.gov, a health savings account is a savings account for individuals with High Deductible Health Plans. Pre-tax money can be placed in the account to be used for deductibles, copayments, and coinsurance on certain qualified medical expenses.
In 2018, if one has an individual deductible of at least $1,350 or a family deductible of at least $2,700, one may take advantage of the many benefits of health-savings accounts. These benefits include lower cost of health insurance, tax-deferred asset growth, and tax-free funds to pay for medical care. However, HSAs also have their disadvantages: the high-deductible requirements are one, but there can also be HSA maintenance fees and significant penalties and taxes if money is withdrawn for non-qualified expenses before one turns 65.
Thus, HSAs can be a great, money-saving option for a lot of people – but they may not be appropriate for everyone. The attorneys at Bach, Jacobs & Byrne, P.A. can advise you on the tax benefits of health savings accounts and other tax-qualified options such as IRAs and ABLE accounts. Call us at (941) 906-1231 to set up a consultation to discuss your situation.