Health Savings Account

A Health Savings Account (HSA) is a form of consumer-directed health coverage, pairing a qualified high deductible health insurance plan (HDHP) with a tax-free savings account. HSAs are designed to reduce healthcare insurance costs for both employers and employees. The HDHP provides protection against major medical expenses and the HSA is used to pay for day-to-day medical expenses.

HSAs enable individuals to pay for qualified medical expenses on a tax-favored basis. Contributions are tax-deductible and eligible withdrawals are tax-free. Individuals control the money in their HSA. Decisions on how to spend the money are made by the individual without relying on a third party or a health insurer. Funds not spent can carry forward to future years and be used penalty-free after age 65 for any purpose seen fit.

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There is a one-time setup fee of $25.00 and interest is earned on all balances. You may write a check or use a HSA debit card to pay for qualified medical expenses.

Advantages of HSAs:

• Affordable Healthcare: Pay less for a HDHP and use the premium savings to fund the HSA
• Tax Savings: Pre-tax contributions, tax-free interest earnings and tax-free withdrawals when used for qualified medical expenses
• Control: Individuals have more control over their healthcare decisions. They decide whether to save the money, use it for medical expenses and which expenses to pay from the account
• Flexibility: HSA funds can be used for a wide range of healthcare related expenses not typically covered by other healthcare accounts, such as purchasing long-term care insurance
• Ownership: HSA funds are a cash asset. Your HSA is a lifetime account which is not tied to any one health plan or employer

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