A Health Savings Account, or a HSA is like an IRA that’s set up just for your medical needs and allows you to prepare for and manage healthcare costs for now and in the future. They were created in 2003 so that individuals who were insured by high-deductible health plans could have a tax-deferred savings account for medical expenses.
If you’re wondering about the high out-of-pocket expenses you might run into if you enroll in a HSA-qualified health plan, you’ll be put at ease knowing a HSA from Community Financial is a great asset to build a safety net for costs due to catastrophic medical expenses or an unexpected trip to a doctor or hospital.
There are many tax advantages that come along with opening a HSA. With a HSA from Community Financial, you can fund your account through tax-deductible contributions. All interest earned on the funds you’ve saved is tax-deferred as well. The distributions you make from your HSA are tax-free when spent on qualified medical expenses. Community Financial will even provide you with a debit card to make paying medical expenses from your HSA easier.
Unlike a Flexible Spending Account, money you don't use in your HSA during a calendar year will remain until the next, and continue to accrue interest until you use it. There’s no need to worry at the end of the year to spend what's left in your account.
As always, we recommend you check with your tax advisor to make sure a Health Savings Account is right for you.