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Are you taking advantage of an HSA?

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Who Qualifies

To qualify for an HSA, you must be enrolled in a high-deductible health insurance plan. According to the IRS (for 2023), to be eligible, the plan must have a minimum annual deductible of $1,400 for self-coverage and $2,800 for family coverage.  Along with this, the out-of-pocket maximum cannot exceed $7,050 and $14,100 respectively.

What is the benefit?

If you are eligible, you can fund an HSA with pre-tax dollars to be used for medical costs. This money continues to grow tax free and is withdrawn tax free as well. This helps you reduce your taxable income and at the same time, save for expected and unexpected health care costs.  Since the contributions are tax-deductible, earnings are tax-deferred and qualifying medical expenses are tax-free, you’re getting triple tax savings.

How do I get an HSA?

If you have health insurance through your employer, they may also have an HSA plan. If not, you can open a separate HSA on your own through various institutions such as a bank or credit union.

Contribution limits

Each year you can contribute up to $3,650 for a self-coverage plan and $7,300 for a family plan (those over 55 years of age may contribute another $1,000). Unlike an FSA, the amount you contribute does not have to be used up by the end of the year and it rolls over each year.