A Health Savings Account or HSA is an account to which you contribute tax-free money for the payment of future medical expenses. When you pay medical expenses with the money, the withdrawals are tax-free as well. If you invest the money in your account, the earnings are also tax-free, giving you triple tax savings.

Who can have an HSA?

Any adult can contribute to an HSA if they:

• Have coverage under an HSA-qualified “high
deductible health plan” (HDHP)
• Have no other first-dollar medical coverage (other
types of insurance like specific injury insurance or
accident, disability, dental care, vision care, or longterm
care insurance are permitted).
• Are not enrolled in Medicare.
• Cannot be claimed as a dependent on someone else’s tax return.

A high deductible health plan is defined as one that has at least a $1,050 deductible for self coverage or $2,100 for a family plan. By enrolling in such a plan you also save on premiums. The deductible must apply to all medical expenses except prevantative care. The annual limit for contributions to your HSA is the amount of your deductible or $2,700, whichever is higher.

For more information on HSA’s and how they work, visit the Treasury Department’s website.