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Health Savings Accounts Now available at The Gerber State Bank What is a Health Savings Account (HSA)? A Health Savings Account (HSA) is an account that you can put money into and use to pay for current health expenses and also save for future qualified medical expenses on a tax-free basis. An HSA is not a "use it or lose it" plan; the funds in your account roll over year after year. To open a Health Savings Account you must be covered under a High Deductible Health Plan. What is a "High Deductible Health Plan" (HDHP)? A HDHP is an inexpensive health insurance plan that generally doesn't pay for the first several thousand dollars of health care expenses (i.e. your "deductible") but will generally cover you after that. Your HSA is availabe to help you pay for the expenses your plan does not cover. To see if your health plan qualifies please contact your health insurance agent. Who Can Have an HSA? Any adult can have a Health Savings Account as long as they are covered by a qualified "High Deductible Health Plan" and are not covered by any other health insurance or enrolled in Medicare. Contributions to your HSA can be made by you, your employer, or both. However, the total contributions are limited annually. Any contribution made to an HSA is deductible on your federal income tax return. Advantages of HSAs Security-High deductible insurance and HSAs can protect against high or unexpected medical bills. Affordability-You should be able to lower your health insurance premiums by switching to health insurance coverage with a higher deductible. Flexability-You can use the funds in your account to pay for current medical expenses, including expenses that your insurance may not cover, or save the money in your account for future needs such as:
· Medical expenses after retirement (before Medicare) · Out-of-pocket expenses when covered by Medicare · Long-term care expenses and insurance
· Whether to save the account for future expenses or pay current medical expenses · Which medical expenses to pay from the account
· Change your medical coverage · Become unemployed · Move to another state · Change your marital status
· tax-free earnings · tax-free withdrawals for qualified medical expenses You can make a contribution to your HSA each year that you are eligible. For 2008, you can contribute up to:
$5,800 -- Family coverage* (2008)
*Individuals age 55 and older are eligible to make additional "catch-up" contributions. Contributions can be made as late as April 15 of the following year. Using Your HSA You can use the money in the account to pay for any "qualified medical expense" permitted under federal tax law. This includes most medical care and services, dental and vision care, and also includes over-the-counter drugs such as aspirin. You can use the money in the account to pay for medical expenses for yourself, your spouse, or your dependent children. You can pay for expenses of your spouse and dependent children even if they are not covered by your HDHP. HEALTH SAVINGS ACCOUNTS
FEES
Please contact The Gerber State Bank today at 217-795-2331 to see about setting up your HSA! |
Frequently Asked Questions
Qualified Medical Expenses
Tax Advantages Rates Fees More Information Contact Us |
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