by Gene Walden
 Health Savings Accounts (HSA) have become an increasingly popular way for individuals to pay for medical expenses with pre-tax dollars.
When you set up an HSA, you are able to deposit money directly into your account to cover future medical costs. All money contributed to an HSA is deducted from your gross income, which means your payments for medical expenses come from tax-free dollars.
Medical expenses covered by HSA plans may include medical, vision and dental expenses. Individuals may contribute up to $2,850 per year to an HSA on their own behalf or $5,650 for a family. As with IRAs and 401k plans, money contributed to an HSA account can be invested in a variety of investments to earn a return on the savings. All investment earnings are sheltered from taxation until the money is withdrawn.
There are two primary components of an HSA plan—a qualified high deductible insurance plan and an individual tax-exempt trust. Money contributed to the trust account can be used to cover routine medical expenses during the current year or saved for future expenses. To learn more about how set up an HSA account to help with your future medical expenses, talk with your financial advisor. |
