A Health Savings Account (HSA) gives you more flexibility and control over your health care costs. That’s because it empowers you to make your own health care decisions.
You will be able to deduct your contributions to your HSA, and the account earnings will accumulate on a tax-deferred basis. Best of all, distributions from your HSA are tax-free if they are used for qualified medical expenses.
To open an HSA, you must select a high-deductible health plan. The deductible must be at least $1,300 for an individual plan and at least $2,600 for a family plan. The major advantage of a high-deductible plan is lower premiums!
You must enroll in a high-deductible health plan before you can make HSA contributions. The maximum annual HSA contribution is the deductible under your high-deductible health plan. But the contribution for 2016 cannot exceed $3,350 for an individual plan or $6,570 for a family plan. Your employer’s contributions to your HSA are tax-free, and you can deduct your own contributions to your HSA on your income tax return.
Unlike contributions to a flexible spending account, the balance of your HSA at the end of the year is carried over to the next year. So you’re not placed in a position of having to “use it or lose it” each year.
To be coordinated with an HSA in 2016, a high-deductible health plan cannot have out-of-pocket limits which exceed $6,550 for an individual plan or $13,100 for a family plan. The high-deductible health plan provides you with protection from catastrophic medical costs, and the HSA provides you with a source of funds to pay some or all of the costs not covered by the health plan.
An HSA enables you to take control of your health care decisions. And since you are the owner of your HSA, it doesn’t matter what your job status is or whether your employer makes contributions to your plan. Your HSA will always follow you.
Semi-annual statements are mailed at no charge. (Members with a WCCU checking account receive a monthly statement of all their WCCU accounts.)
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Westby Co-op Credit Union is federally insured by the National Credit Union Administration (NCUA).