A Health Savings Account (HSA) is a tax sheltered savings account similar to an IRA, but earmarked towards medical expenses. Deposits are 100% tax deductible and can be easily withdrawn by check or debit card to pay for qualified medical bills. A HSA is combined with a High Deductible Health Plan (HDHP) which covers larger medical expenses after the deductible is met. You can withdraw funds from your HSA tax-free for qualified medical expenses. Funds not used for qualified medical expenses in a given year are rolled over to the next year and grow tax-free with interest earned. As your HSA account grows, funds are available for future medical expenses and even retirement. At age 65, you can withdraw from your HSA for any purpose (not just medical) and pay normal income taxes.
Benefits of a GR Family Credit Union HSA
- No opening, maintenance or transaction fees
- No minimum balance requirements
- Free Debit Card
- Unlimited check writing privileges
- Free 24 hour online banking
- Earnings are tax-free when used for a qualified medical expense
- Funds roll over year to year
- Funds can grow until retirement
To Be Eligible for an HSA You Must:
- Be covered by a High Deductible Health Plan (HDHP).
- Not be covered by any other health plans (unless dental or vision plan; or other qualified HDHP).
- Not be enrolled in Medicare.
- Not be claimed as a dependant on another person’s tax return
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Definition of a High Deductible Health Plan (HDHP)
|For 2010||Single Policy||Family Policy|
|Maximum out of Pocket||$5,950||$11,900|
Annual contributions are $3,050 for single plans and $6,150 for family plans.*
Individuals who have reached Age 55 are permitted to make “Catch-up” contributions. The “Catch-up” contribution is determined as follows:
*Effective January 1, 2007. Individuals may contribute the maximum amount as determined by the IRS even if the individual’s deductible is less. Individuals may contribute the maximum annual amount set by the IRS regardless of when their plan coverage began, rather than being prorated. The fastest way to find out if your health insurance plan is HSA qualified is to ask your employer or health insurance company.