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Is a Health Savings Account Right For Me?


Is a Health Savings Account Right For Me?

A Health Savings Account (HSA) makes for an easy way to save and pay for qualified medical expenses now and down the road. Though it’s often confused with a Flexible Savings Account (FSA), a Health Savings Account is not the same. For one thing, the funds roll from year to year and will move with you if you change jobs, become unemployed or change medical coverage.

So what is an HSA?

It’s a special account that is tax-advantaged and available to individuals who have High Deductible Health Insurance Plans (HDHP). *

How do HSAs work?

Pre-tax contributions can be made by you, your employer or both, up to an annual contribution limit. As you incur medical and health-related expenses, like insurance copays and prescriptions or long-term care services, the funds in your HSA can be used to cover those costs. A complete list of qualifying expenses and annual contribution limits can be found at (Publication 969).

How do I know if I’m eligible?

Most adults under 65 who are not enrolled in Medicare and are covered under a high-deductible health plan (HDHP) can qualify for an HSA, but it is up to the account holders to determine their own eligibility. Contact your local financial representative for more information and to see if you qualify for an HSA or learn more here.

What are some of the other benefits?

Even if you do not expect to have medical expenses during the year, consider an HSA if you’re eligible. From the moment you open it, even if your balance is zero, any medical expense you incur will qualify for tax-free reimbursement when the expense happens.

So, say you have nothing in your HSA but you unexpectedly have to go to a doctor and end up with a bill for $75. Just add the funds to your HSA and reimburse yourself so you can get the tax break on that bill.

Also, having an HSA in place now is a great way to save for expenses that may happen during your retirement, when you are likely to have higher medical costs and less income to pay for them. One of the great benefits of HSAs is that the funds carry forward from year to year and can always be used to pay for qualified health care expenses tax-free.

Learn more about FCCU’s HSA plans or contact your local financial representative.


*Please contact your tax advisor for tax related requirements.