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Health Savings Accounts - Is An HSA Another Retirement Plan?




What is a Health Savings Account (HSA)?


What is a High Deductible Health Plan?

A HDHP is a plan that doesn’t provide much in the way of coverage for routine medical expenses like visiting a doctor because you suspect the flu. Instead, a HDHP’s coverage is primarily for major expenses such as costly procedures like surgeries or other medical events requiring hospitalization.

Specifically, HDHPs in 2009 can have a deductible of no less than $1,150 for an individual plan and $2,300 for an individual plus family plan. The maximum amount out-of-pocket limits are $5,800 (individual) and $11,600 (individual and family).

How Much Can You Contribute to an HSA?

The amount you may contribute to an HSA varies based on the type of plan you have, your age, and the calendar year. In 2009, for example, contributions to an HSA covering a family where no one is over 55 can reach up to $5,950. An HSA contribution results in an above-the-line tax deduction on the tax return. As such, an individual does not need to have itemized in order to receive a tax advantage from an HSA contribution.

How an HSA Can Assist in Your Retirement Planning




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