Here’s what to know about HSAs.
If you have a qualifying high-deductible health plan (HDHP), you might find yourself worrying about how to best manage your medical expenses. Health savings accounts (HSAs) offer a safe and easy way to set aside money for medical expenses.
What is an HSA?
An HSA is a tax-favored savings account for individuals and families covered by a qualifying HDHP. Contributions to an HSA are tax deductible, and distributions are tax free if used for qualified medical expenses. HSAs also allow your employer to make
pre-tax contributions on your behalf.
Can anyone open an HSA?
You must meet some eligibility requirements to participate in an HSA, and you need to maintain an RCU membership.
What are the benefits of an HSA?
An HSA can save you money. Not only will you receive tax benefits for qualified distributions from your account, but you will also receive tax benefits similar to those of IRA-type accounts.
- Deposits are tax free.
- Earnings grow tax free.
- You can access your account with your RCU HSA debit card or by writing a check.
- Funds carry over year after year.
How much can I contribute to an HSA?
For 2020, the contribution limit is $3,550 for single coverage or $7,100 for family coverage. If you’re over age 55, you can make a $1,000 “catch-up” contribution as well.
If you’d like to learn more about HSAs or open an account, contact us today!