For those of you with a high-deductible health insurance plan, you may qualify for a Health Savings Account (HSA). A Health Savings account allows you to pay for qualified medical expenses with tax-free dollars. For 2019, the IRS defines a high deductible health plan with having a deductible of $1,350 for an individual policy or $2,700 for a family policy.
Here are some of the benefits of a Health Savings Account HSA:
Pre-Tax Contributions and After-Tax Contributions
Contributions to a Health Savings account are made with pre-tax dollars. Through payroll deduction by your employer and are not included in your gross income, This reduces your taxable income for the year. When you make contributions with after-tax dollars they can also be deducted from your gross income on your tax return Again reducing your tax bill for the year.
Any interest or other earnings on the money in your Health Savings Account (HSA) grows tax-free.
Health Savings Accounts (HSA) withdrawals are not subject to federal (and in most cases, state) taxes as long as the withdrawals are used for qualified medical expenses.
Wide range of qualifying expenses
Eligible expenses include a wide range of medical, dental, and mental health services. For more details, see the IRS Publication 502.
The money in your Health Savings Account (HSA) rolls over into the next year. Making it available for future qualified medical expenses, or it can be left to grow tax-free until medical expenses are needed.
Ease of use
Most HSA’s provide its users with a debit card and online account, which helps users pay expenses with a swipe of the card, it also helps keep track of medical payments and yearly contributions.
For more information please contact your health insurance provider.