« Health Savings Accounts May Be Treated Differently In Wisconsin | Main | Health Savings Accounts Grow 30 Percent at Chase »
January 05, 2011
Health Savings Accounts Manage Medical Expenses
If you're relatively healthy without a lot of medical costs and you're in a high tax bracket, a Health Savings Account can get you lower health insurance premiums and tax deductions for health care.
A Health Savings Account lets you earn interest tax free to save for future health-related expenses. That's how an Health Savings Account Plan lets you grow your balance quickly.
Any funds you don't use for qualified health care expenses roll over every year and are yours to keep independent of your employment. An Health Savings Account can also double as a retirement fund. Think of an Health Savings Account as a medical IRA.
The most important advantage of an Health Savings Account is that it makes health care expenses tax deductible. That's a big help when you're in a high tax bracket.
After you turn 65, you may withdraw funds from your Health Savings Account for any use at all. Until you are 65, if you make a withdrawal for anything other than a qualified medical expense, you'll have a 20 percent penalty and tax on the amount withdrawn.
A Health Savings Account only works with a high-deductible health insurance policy. These HSA Plans typically have lower premiums than full coverage insurance, and you may use your Health Savings Account to pay for your premiums.
Posted by Wiley Long at January 5, 2011 11:18 AM