Health Savings Accounts (HSAs) in Fresno CA & Madera CA
A health savings account (HSA) is a medical spending account that allows you to set aside pre-tax money to use on eligible medical expenses throughout the calendar year. Not everyone can have an HSA, though, and contributions are subject to annual limits set by the IRS. To learn more about HSAs and how they can potentially help you save money, give CCI Insurance Services a call today. We can go over the basics of an HSA as well as eligibility requirements and walk through whether it’s the right type of medical spending account for you.
How Do I Qualify for an HSA?
Not everyone is eligible to open an HSA. Generally, the eligibility requirements for an HSA include:
· Having a qualified high deductible health plan (HDHP)
· Having no other health insurance coverage
· Not being enrolled in Medicare
· Not being able to be claimed as a dependent on someone else’s tax return
You do not necessarily need an employer-sponsored HSA to open this type of account. Contact CCI Insurance Services to learn how you can open an HSA on your own.
How Does an HSA Work?
Once you open an HSA, you’re eligible to contribute pre-tax funds up to a certain limit set forth by the IRS. These limits are adjusted for inflation and may change year over year. For 2022, the individual contribution limit is $3,650 and the family limit is $7,300. You can then use those funds to pay for eligible medical expenses, like copays, deductibles, out-of-pocket costs, and prescription drug costs throughout the year. Unlike flexible spending accounts (FSAs), any money that’s left in your HSA at the end of the year automatically rolls over into the next year.
You may also be able to use your HSA funds to pay for non-eligible medical expenses, but you may be assessed a tax penalty for doing so. Talk to your CCI Insurance Services agent to learn more about using an HSA.
What Are the Benefits of an HSA?
There are several benefits to using an HSA account, including the following:
· Your account can be contributed to and used income tax-free. An HSA is an account you contribute to that you can pull out of when used for qualified medical expenses.
· If you don’t use your HSA, you won’t lose it. Any leftover funds at the end of the year can be rolled over to the next, and your HSA may be able to follow you through job changes.
· You may be able to lower your overall health care costs. By using pre-tax funds from your HSA to pay for qualified out-of-pocket expenses, you may be able to lower your overall health costs.
As you age and medical expenses often increase, having an HSA can be of benefit. To determine if the benefits are right for you, contact your agent.
Start An HSA Today
Having an HSA can be one of the best tools available for tax-advantaged savings. At CCI Insurance Services, we’re ready to assist you with getting started on your investment needs. To get started with an HSA, contact your agent today.