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Insurance 101

Health Savings Account

What is an HSA?

An HSA is a Health Savings Account, and it is just that, a savings account earmarked for health related expenses not covered by insurance plans.

How to I open a Health Savings Account?

First, you buy a high deductible health insurance plan. HSA’s can only be used in conjunction with high deductible plans.

Then, you can fill out an application with any participating bank, using the data in your health insurance plan. Here is a link to a bank that offers Health Savings Accounts for its members.

What is a deductible, and how do I know that my plan qualifies as a high deductible health plan?

A deductible is a portion of health insurance expenses that you have to pay out of pocket each calendar year before the insurer begins to pay. What is considered high varies for each insurance provider, but generally,a deductible over $2,000 is considered high. The health plan that you purchase from the insurance provider will designate whether it is high deductible or not.

Are there tax advantages to having a Health Savings Account?

Yes. The amount contributed to your health savings account is a credit on page 1 of your tax return. Consult your tax professional regarding this tax advantage.

Who benefits most from having a Health Savings Account?

Those people who use services traditionally not covered by a health insurance plan, everything from alternative medicine to special needs education.

Where can I go for more information about HSA’s?

Check out our HSA Blog

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