Health Savings Accounts (HSA)
A Health Savings Account or HSA is a tax advantaged medical savings account that is owned by the individual. They are designed to be used in conjunction with a High Deductible Health Insurance Plan. The money contributed to the account is not subject to the federal tax at the time of deposit, so it’s pre-tax dollars for employees or tax deductible if you are self-employed. The funds in a Health Savings Account can be used to pay all eligible medical related expenses that are not covered by your Health Insurance Plan.
Each year at the beginning of May the IRS releases the HSA Contribution Limits for the coming year. These rules go into affect January 1, 2021. The new contribution limits for Individual HSA Plans will be $3600 For Family Plans the new HSA contribution limits will be $7200. The HSA Catch Up Provisions for plan owners age 55 or over remains unchanged at $1000. This means that if the owner has an individual plan they can contribute a maximum of $4600 or $8200 if they are the owner of a family plan.
This is a wonderful way for Your Employees and Self-Employed members to save on their medical expenses.
Demo CU is here to help you. Stop by either office or Call (317) 886-8528 to see if you are eligible to open a HSA or to ask any questions you may have regarding these accounts.