What is an HSA account?
Health Savings Accounts, or HSAs, are a popular are a type of medical reimbursement plan. HSAs are individual bank accounts owned by employees that allow for tax-free payment or reimbursement of eligible medical expenses. An employer usually offers an HSA-qualified high-deductible health plan and an HSA. U.S. federal regulations require citizens to have a minimum deductible on their health insurance from all sources in order to make tax-deductible contributions to their Health Savings Accounts (HSA).
Taxpayers receive a 100% income tax deduction on annual contributions, they may withdraw HSA funds tax-free to reimburse themselves for qualified medical expenses, and they may defer taking such reimbursements indefinitely without penalties.
HSAs are unique—with triple tax advantages:
- Tax-deductible contributions,
- Tax-free accumulation of interest and dividends tax-free, and
- Tax-free distributions for qualified medical expenses.
2016 Annual HSA Contribution Limits
For calendar year 2016, the annual HSA contribution limits are:
- Individuals (self-only coverage) – $3,350 (no change from 2015)
- Family coverage – $6,750 (up $100 from 2015)
For further questions, call our offices at 210-949-0002 to speak with a representative.