By Tom Gregory

A valuable resource that many individuals may not be fully utilizing -health savings accounts (HSAs). Let's explore how HSAs work and the numerous benefits they offer.

Here are the key points to consider:

Eligibility and Establishment:

·        To establish an HSA, individuals must first be covered by a high deductible health plan (HDHP) as mandated by the government.

Functionality of HSAs:

·        HSAs function similarly to traditional checking accounts and are owned by individuals, offering portability across different jobs and into retirement.

·        Both employers and employees can contribute to HSAs on a pretax basis, thereby avoiding federal withholding and FICA deductions on deposits.

Usage of Funds:

·        HSA funds can be withdrawn to cover unreimbursed medical, dental, and vision expenses, even those not covered by employer benefit plans.

·        Individuals who contribute to an HSA should consider leveraging its tax advantages by using it to pay for all eligible medical expenses.

·       Family Coverage and Expenses: Did you know that HSA funds can be used to cover immediate family members' medical expenses, irrespective of whether they are covered by the individual's insurance plan?

Expanded Options:

·        A recent development allows HSA funds to be used for purchasing over-the-counter medicines and supplies related to medical treatment.

HSAs offer a bunch of benefits, from tax advantages to flexibility in covering medical expenses. It's essential to familiarize yourself with the rules governing HSAs and, if eligible, capitalize on this tax-favored benefit to optimize your healthcare spending.

If you have any questions or need guidance on maximizing the benefits of your HSA, call us. We're here to help you navigate the complexities and opportunities associated with health savings accounts.

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