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Health Savings Accounts (HSAs)
A Health Savings Account, or HSA, can be a valuable tool to help your employees save money for medical expenses for themselves and their family. An HSA is a tax-exempt account established specifically for the purpose of paying qualified medical expenses. Most people who are covered under an IRS-qualified High Deductible Health Plan (HDHP), such as a Rocky Mountain Good Health Savings Plan, can open and contribute to an HSA.
Benefits of a Health Savings Account:
- No application or set-up fee
- No minimum balance is required
- The account is free for individuals who use direct deposit
- Interest is paid on balances over $1
- A free, no annual fee, Smart Debit Card is provided
- A free box of checks is provided
- Money transfer functions are free
- An account closure fee is not charged
Advantages of a Health Savings Account
Tax Deductible Contributions and Distributions
The money that is deposited into an HSA will reduce the account holder’s taxable income for the year, even if that person does not itemize their taxes. The money that is deposited into the account is 100 percent tax deductible, up to the IRS maximum.
Unused Contributions Rollover
Another advantage is that the account holder is not obligated to use the money that they contribute to their HSA each calendar year. The money can remain in the account and earn interest until it is needed – whether that’s in a month, next year, or in 10 years. At the age of 65, the account can be used as retirement savings or continue to be used for medical expenses.
