How can a health savings account help me?
A health savings account (HSA) is a medical savings account that allows for the payment of qualified medical expenses on a pre-tax basis (meaning taxable income for the IRS is reduced by the amount of the deposits; each state has its own rules...CA does not conform to Federal law on this). If funds are withdrawn for non-qualified expenses, the account holder will be liable for income taxes and an early withdrawal penalty.
The account is only available for those who have a health insurance plan with a high-deductible, which means those self-only plans with deductibles of $1,350+ and maximum out-of-pocket of $6,650...or family plans with deductibles of $2,700+ and max out-of-pocket of $13,300.
The max contributions for 2020 are $3,550 for self-only plans and $7,100 for family plans.
Unlike flex-spending accounts, HSA funds do not expire and can roll over year after year, allowing for accumulation if not spent.
Feel free to contact us if you have questions on whether an HSA account is right for you.