A HSA is a tax-favored saving account that is used in conjunction with a high-deductible HSA-eligible health insurance plan to make healthcare more affordable and to save for retirement HSA’s are similar to an IRA but with some additional advantages. Pre-tax money is deposited each year into an HSA and in the case of the Health Savings Account funds can be easily withdrawn at any time with no penalty* to pay for qualified medical expenses. Withdrawals can also be made for non-medical purposes, but will be taxed as normal income and are subject to a 10 percent penalty if done prior to age 65.
Any HSA funds not used each year remain in the account, and earn interest tax-free to supplement medical expenses in the future.
Like an IRA, the account belongs to you, not your employer. But unlike an IRA, your employer CAN contribute to your HSA.
Click this link for your
HSA road rules 2008.
Click this link for your
HSA road rules 2009.
