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MONEY MATTERS: Health savings account

Money Matters

What exactly is a health savings account? How does it work?

A health savings account is a tax favored way to set aside money to pay for healthcare costs. You setup a high deductible health insurance plan and you are able to set aside $3,400 a year if you are single and $6,750 if you are a joint income into this account. It grows tax deferred and when you take it out and use it for medical expenses it comes out tax free.

Who does this usually fit?

It works really good for those that are self employed. Often times people are between jobs or sometimes people will set it up because they have the ability to get health insurance through their employer but its more expensive. Its better to do it this way.

How do you tell if you are eligible for this? Who can you turn to to see if this is right for you?

Go to your financial advisor or your insurance carrier because all of them will have it available and it doesn't fit for everyone but for the right person its a good fit.

Whats the limit you can contribute again?

You can contribute, if you file single, up to $3,400 a year and if you are filing jointly it's $6,750.

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