Health Savings Accounts
What is a Health Savings Account (HSA)?
Health Savings Accounts are tax-favored accounts designed to help individuals who are covered by High Deductible Health Plans (HDHPs) pay medical expenses for themselves, their spouses, and their dependents. They were created by Congress in an attempt to combat rising medical costs by providing an incentive for more consumers to pay "first-dollar" medical expenses. The Health Savings Account has been available at Security Financial Bank since 2004.
Who is eligible for an HSA?
HSAs are available to anyone who is covered by a HDHP. If you have an employer sponsored HDHP, your employer may make contributions on your behalf. The employers' contributions may reduce the amount that you can contribute but will not eliminate your ability to make contributions.
You are eligible for any month if you: are covered under an HDHP on the first day of that month are not also covered by any other health plan that is not an HDHP (with limited exceptions) are not enrolled in Medicare, and are not eligible to be claimed as a dependent on another person's tax return.
What are the benefits of an HSA?
HSAs can provide significant tax benefits related to paying qualified medical expenses. In addition, they may also serve as additional income for retirement. Tax Benefits: HSA contributions are excluded from income whether they are made by employer or employee. HSA earnings are tax-deferred. If used for qualified medical expenses, HSA assets are never taxed. Unused HSA assets may be used for retirement. The distributions will be subject to income taxes, however. They are also subject to a 10 percent penalty if taken before the HSA owner turns age 65. Upon the death of the HSA owner, account assets become the property of a named beneficiary. A spouse beneficiary may treat the HSA account as his or her own, while nonspouse beneficiaries must treat such inherited assets as ordinary taxable income.
Security Financial Bank's Health Savings Account Benefits:
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