An HSA plan helps you control your health care spending.
With the price of health care on the rise, it has never been more important for consumers to take charge of their own health care spending. The health savings account, or HSA, is a powerful tool for consumers. The funds accumulated in an HSA can be used to pay for over-the-counter medications, prescription drugs, co-payments, deductibles and other legitimate medical expenses. Consumers can fund their HSAs directly, or the accounts can be funded through regular payroll deductions. Money invested in an HSA is not subject to taxation, so it goes even further.
Non-Covered Expenses
HSA participants must use the funds in their accounts to pay for health care expenses that are not subject to reimbursement from other sources. Plan participants are not permitted to double dip by paying for a medical procedure, medical device or other expense with HSA funds and then submitting those same expenses for reimbursement by their individual or employer-sponsored health care plan.
Contribution Limits
Participants in HSA plans are also subject to limits on how much they can put away annually in the plans. For the 2009 tax year, HSA holders can contribute a maximum of $3,000 for an individual plan or $6,000 for an HSA plan that covers other family members. HSA holders age 55 and older can contribute an extra $1,000 to their plans.
Deductible Requirements
In order to open a health savings account, you must first participate in a high deductible health plan, known in the insurance business as an HDHP. In order to qualify for an HSA, the plan must have a minimum deductible of $1,100 for an individual plan or $2,200 for a family plan. The maximum deductible allowed for an HSA-eligible HDHP is $5,800 for a single plan or $11,600 for a family insurance plan.
Tags: health care, care spending, health care spending, health savings, health savings account
