The Basics of Health Savings Accounts
August 10th, 2015 by beasleyferber
A Health Savings Account (HSA) is a type of account that is paired with a health insurance policy that meets certain criteria, including a high deductible. The account is meant to be used to pay for the deductible, or for items that the health insurance plan does not cover. Deposits and withdrawals are tax free, assuming the funds are spent on eligible items, and unspent money in the account rolls over from year to year.
In order to maintian the tax free aspect of these accounts,(and avoid a 20% penalty) it is important to know what items are eligible. A recent change made by the Affordable Care Act is that most over the counter drugs are eligible only if you get a doctor’s prescription for them. Two websites can provide useful information. One is hsastore.com, and the other is FSAstore.com. Please note that we are not endorsing these web sites in any way, nor have we checked the accuracy of the information they present. Rather, we are just making people aware of them as a resource.