Health Savings Accounts
A Health Savings Account (HSA) is a tax-exempt trust or custodial account that you can establish with a qualified HSA trustee that can be used to pay for or reimburse yourself for medical, dental and vision expenses that you incur.
The benefits of an HSA to an employee include the following:
- Employees can claim a tax deduction for contributions made to their HSA.
- Contributions to employee HSAs made by their employer may be excluded from the employee's gross income.
- Contributions remain in the employee's account from year to year until they use them.
- Interest or other earnings on the assets in their HSA are tax free.
Some of the rules that apply to Health Savings Accounts include:
- In order to participate in an HSA employees must be a participant in a high-deductible health plan (HDHP).
- A HDHP, at a minimum, must provide for a deductible of at least $1,250 for single individuals and $2,500 for participants with one or more covered dependents.
- The limit that you can contribute to an HSA for 2014 is $3,300 for single individuals and $6,550 for individuals with coverage that includes one or more covered dependents.
For other rules please click here to view IRS Publication 969.
For more information about offering Consumer-Driven Health Plans with your schools health plan, contact Linda Geist at 302-656-4944 or email@example.com.