Health Savings Accounts (HSAs): What You Need to Know - Post-Journal
A Health Savings Account, or “HSA” is a wonderful financial vehicle, offered by many employers and used by millions of Americans to pay for their healthcare expenses using un-taxed savings. Monies contributed to an HSA (and often matching funds contributed by an employer) are deposited into the HSA tax free, thus reducing your income tax burden while you’re working, and the withdrawals used to pay your medical expenses aren’t taxed either. Sort of a “no brainer,” so to speak. But for such an attractive investment vehicle there are also some very specific rules the IRS imposes on HSAs, which you should be aware of if you’re planning to use one. For one thing, you cannot deposit money into an HSA if you are on Medicare. That’s because to be eligible for an HSA you must be on a high-deductible healthcare plan and Medicare is not a high-deductible plan. Also, withdrawals from your HSA must be used for medical reimbursement, otherwise those withdrawals become taxable income. For more on these, and other HSA rules, read this Senior Lives Matter article by Janell Sluga appearing in The Post-Journal.