For those of you with a high-deductible health insurance plan, you may qualify for a Health Savings Account (HSA).  A HSA allows you to pay for qualified medical expenses with tax-free dollars. That is to say, this can be hugely beneficial. For 2019, the IRS defines a high deductible health plan with having a deductible of $1,350 for an individual policy or $2,700 for a family policy.

Here are some of the benefits of a Health Savings Account HSA:

Pre-Tax Contributions and After-Tax Contributions

Contributions to a Health Savings account are made with pre-tax dollars. Therefore, they are through payroll deduction by your employer and are not included in your gross income. Consequently, this reduces your taxable income for the year. When you make contributions with after-tax dollars they can also be deducted from your gross income on your tax return. And again, reducing your tax bill for the year.

Tax-Free Earnings

Any interest or other earnings on the money in your Health Savings Account (HSA) grows tax-free.

Tax-Free Withdrawals

Health Savings Accounts (HSA) withdrawals are not subject to federal taxes. And in most cases, state taxes as well. But this is true, only as long as the withdrawals are used for qualified medical expenses.

Wide range of qualifying expenses

Eligible expenses include a wide range of medical, dental, and mental health services. For more details, see the IRS Publication 502.

Annual Rollover

The money in your Health Savings Account (HSA) rolls over into the next year. In short, making it available for future qualified medical expenses. So it can be left to grow tax-free until medical expenses are needed.

Ease of use

Most HSA’s provide its users with a debit card and online account, which helps users pay expenses with a swipe of the card. Most importantly, it also helps keep track of medical payments and yearly contributions.

In short, having a Health Savings Account can be hugely for an individual and for a family. For more information please contact your health insurance provider.