Health Savings Accounts

A Health Savings Account, or HSA, is a savings account that can be used to pay for certain medical expenses for the individual and their dependents. A HSA must be paired with a HSA-qualified health plan. The HSA allows you to make pre-tax contributions to a savings account that can be used to pay for your medical expenses. Money can be deposited into an HSA for immediate use, or long-term savings, thus allowing you to pay some medical expenses prior to the money being subject to income tax. HSAs also earn tax-free interest.

At the age of 65, HSA funds can be withdrawn for any reason and are then taxed as income. However, you can still use the funds tax free if they are being used to pay pre-qualified medical expenses. Because interest and investment income earned on an HSA are not taxed, HSAs are great retirement savings accounts.

HSA Qualified Medical Expenses (QMEs):

  • - Acupuncture
  • - Birth control
  • - Chiropractor
  • - Contact lenses
  • - Dental treatment
  • - Prescription eyeglasses
  • - Fertility enhancement
  • - Hearing aids
  • - Lab work
  • - Medical supplies
  • - Physical exams
  • - Prescriptions
  • - Orthodontia
  • - Radiology
  • - Stop-smoking programs
  • - Surgery (non-cosmetic)
  • - Therapy