HEALTH SAVINGS ACCOUNT

Health savings accounts were created to help individuals and families save for qualified medical expenses on a tax-free basis.

Health savings accounts (HSAs) can be used for expenses such as prescriptions, eye care, dental and some over-the-counter medications. The funds contributed to your HSA are tax-deductible, reducing your taxable income. When funds are distributed out of the HSA to pay for qualified medical expenses, the funds then come out of the HSA plan tax-free.

Consider a health savings account if you meet the following conditions:

  • You have a high-deductible health plan.
  • You are generally not covered by any health plan that is not a high-deductible plan.
  • You are not enrolled in Medicare.
  • You may not be claimed as a dependant on another person’s tax return.
Contribution Limits 2016 2017
Health savings account (HSA) Individual: $3,350; Family $6,750; Catch-up of $1,000 if over 55) Individual: $3,400; Family: $6,750; Catch-up of $1,000 of over 55)