Otherwise known as an HSA, a health savings account combines a tax favored savings account with high deductible health insurance. The money that is in a savings account helps pay for the deductible. After the deductible has been met, the insurance will then pay. Any money that has been left in the savings account will earn interest and is strictly yours to keep. Any contributions you make to a Florida health savings account are also 100% deductible, which makes it similar to a traditional IRA. However, unlike an IRA the distributions are used to pay medical expenses that are qualified. Those distributions can also be taken tax-free. Other assets left within the account will remain tax-deferred.
Are You Eligible for an HSA?
You may be eligible for health savings account. If you’re covered by what is considered to be a qualified high deductible health insurance plan. If you are covered by other health insurance, enrolled in Medicare or considered to be a dependent then you would not be eligible for a health savings account. In order to be 100% clear on the requirements, it is a good idea to speak with HSA specialists at Mountain West IRA.
The Advantages of a Health Savings Account
There are actually many advantages to having a health savings account. For one, it is tax-deductible. Any contributions that you make to your HSA are also 100% deductible within the legal limit, just like any IRA. They are a tax-free advantage for many people who want the ability to be able to withdraw many from this type of account to pay for medical expenses that are qualified. Those types of expenses include vision and dental. You are never taxed for this type of withdrawal either. An HSA account is also tax deferred, meaning that the interest earned and accumulated cannot be taxed. Any unused money in an HSA has not forfeited annually either, it is yours and will continue to grow in a tax-deferred manner.