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Health savings accounts (HSA's)



Health Savings Accounts allow individuals to set aside money on a pre-tax basis to pay for qualified medical expenses.  By using untaxed dollars in an HSA to pay for deductibles, copays, coinsurance, and other expenses, you can lower your overall health care costs and save on income taxes.


An HSA can be used only if you have a High Deductible Health Plan (HDHP) – generally any health plan with a deductible of at least $1,350 for an individual or $2,700 for a family.  Carriers will show on their list of available plans whether an HDHP plan is HSA compatible or not.


In 2017, an individual could contribute up to $3,400 for self-only coverage and up to $6,750 for family coverage.  HSA funds roll over year to year if you don’t spend them, and an HSA account can earn interest that is not taxable.


HSA’s can be set up through the carrier or you can open an HSA account with your personal bank or some other financial institutions.


Data released in 2012 indicates that the use of HSA’s is increasing.  American Health Insurance Plans reported that the number of people covered by an HSA / HDHP combination more than doubled between January 2008 to January 2012.  HDHP premiums tend to be lower, and make an attractive option for both employers and employees. 


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