What is a Health Savings Account?
A Health Savings Account is a type of savings account that lets you set aside money on a pre-tax basis to pay for qualified medical expenses like glasses, standard treatments or dental care.
For the tax year 2020, you may be eligible to contribute up to $3,550 for single coverage and up to $7,100 for family coverage. Those aged 55 and older by the end of the year can contribute an extra $1,000.
The following criteria must be met in order to qualify for a Health Savings Account:
- You are covered under a High-Deductible Health Plan (HDHP) for health insurance OR you are interested in switching to a High-Deductible Health Plan.
- You are not enrolled in Medicare.
- You are not claimed as a dependent on someone else's tax return.
What is a High Deductible Health Plan (HDHP)?
A HDHP is a health insurance plan that has an annual deductible and annual out-of-pocket expense limit that meets requirements set by federal law. Lincoln Savings Bank offers a number of HDHP compliant health insurance plans. Contact one of our insurance professionals for a NO COST, NO OBLIGATION initial consultation to help you determine which plan will best meet your needs.
What are the Advantages of a Health Savings Account?
- Security - You are protected from high or unexpected medical expenses.
- Affordability - You may be able to lower your health insurance premiums by switching to a High Deductible Health Plan.
- Savings - Your savings may qualify for interest income or investment earnings.
- Control - You make all the decisions about how much you save, which medical expenses you will pay with the account, whether to invest the money in the account and more!
- Portability - You can keep your HSA even if you have a major life change; such as a job change, move, or change of marital status.
- Ownership - Your funds remain in your account from year-to-year. There is no "use it or lose it" rule.
- Tax Savings - Your HSA provides triple tax savings.
- 1) tax deductions for contributions
- 2) tax-free earnings
- 3) tax-free withdrawals for qualified medical expenses.
Learn more about how a Health Savings Account can benefit you!
Don’t be caught off-guard with a medical emergency or even simple medical.