A Health Savings Account is an excellent way to accumulate funds for future medical expenses. The balance can be carried over from year-to-year and is tax deductible.
Central Maine FCU offers Health Savings Accounts in the form of a dividend bearing checking account, so you can use a debit card to access your HSA.
The contribution limits are adjusted each year for inflation, and they are different for single and family policies. Individuals who will be 55 years old by the end of the year have higher limits. They may also make catch up contributions which amount to an extra $1,000.00. An account owner's contribution limit is reduced by the amount of employer contributions and by contributions made to other medical savings accounts.
Employer contributions to an Health Savings Account are excluded from the employee's income as long as the employee doesn't exceed the contribution limit. Like our IRA program, the contribution deadline is April 15 of the following year.
This is a health plan that provides general health coverage while meeting certain requirements with deductibles and out of pocket expenses. These requirements are adjusted each year and are different for single and family policies. An HDHP can provide preventive care, but no other benefits can be provided until the deductible is met.
An eligible individual is generally someone who is covered by a high deductible health plan (HDHP), is not covered by another medical plan or Medicare, and is not claimed as a dependent. Eligibility is determined on a monthly basis. Those who become eligible in December are treated as being eligible for the entire year. If a member is unsure whether he/she is covered by an HDHP, the member can request a certificate of insurance from the insurer. This certificate would have an HSA eligibility statement.
Qualified Medical Expenses
Qualified medical expenses are amounts paid by an account owner for certain types of medical care for the owner, spouse or any dependent of the owner that are not covered by insurance or any other health plan.
Allowable expenditures from your HSA include:
Dental Treatments, Prescription Drugs, Eyeglasses, Hospital Services, Laboratory Fees, Long-Term Care expenses, and Nursing Homes. A complete list is available in IRS Publication 502, which is available on the web.