Health savings accounts
Health savings accounts (HSAs) allow you to pay for your current health care expenses and save for future qualified health expenses on a tax-free basis.
You, your family members and your employer can make tax-deductible contributions to your account.
You can use your HSA to pay the deductible on your high-deductible health plan and any other qualified expenses (www.irs.gov) your health plan doesn’t cover, such as vision and dental fees, and over-the-counter drugs.
Who qualifies for an HSA
- You must have a qualified high-deductible health plan (HDHP)
- You can’t have other health insurance
- You may have auto, dental, vision, disability and long-term care insurance that pays medical bills
How much can you deposit into your HSA each year?
For 2016, the maximum amount you can deposit is:
- $3,350 for single coverage
- $6,750 for family coverage
If you're age 55 or older, you can deposit additional money (also called catch-up contributions) into your HSA account. The maximum annual catch-up contribution you can make is $1,000.
You can’t open up an HSA if you:
- Enroll in Medicare,
- Received benefits from the Department of Veterans Affairs during the past three months or
- Currently participate in an employer-sponsored HSA.
To find out if you qualify, check with your employer’s human resource department.
What qualifies as a high deductible health plan
In 2016, a health plan qualifies as a high deductible health plan if it has:
|Annual deductible of at least:||Maximum annual out-of-pocket expenses|
High deductible health plans must comply with state insurance laws and could include preventive care benefits.