Featured Savings Article


´╗┐Provisions Of Health Savings Accounts

The Health Savings Accounts (HSA) is one of the latest techniques offered for the benefit of tax protection to the citizens of the United States. An HSA is basically a tax-advantaged medical savings account offered to those taxpayers in the US, who are enrolled under the High Deductible Health Plan.

A High Deductible Health Plan or HDHP is a low-cost health insurance plan, which usually starts the coverage of your medial expenses after the first few thousand dollars of health care expenses have been met otherwise. There is a minimum deductible on a HDHP which qualifies you for the coverage under the Health Savings Accounts, which actually undergoes a variation from time to time.

The Concept and Procedures

The deposits required to be made to an HSA can be done by the policyholder himself, his employer or even by a third person involved. In case the contributions are made from the employer, the same will be done on a post-tax basis, which is then further used to reduce the gross taxable income in the next year.

The investments made in the HSA can be done in a manner, similar to that of investments in an Individual Retirement Account (IRA). Such earnings procured form investments are exempt from taxation until the money is actually withdrawn.

When the withdrawals have to be carried out, the participants of such health savings accounts do not require to get an advance approval from the HSA trustee or their medical insurer. However it is important that you maintain all the essential documentation as evidence to the qualified medical expenses. In case the applicant fails to produce the required documents, the expenses can be disqualified and the individuals concerned can actually be charged a penalty for the purpose.

Such concepts of Health Savings Accounts are mainly said to benefit two groups of consumers, including those who are either very hale or hearty or those who suffer from extreme ill-health. All the expenses incurred on medical conditions will be credited towards the deductible. Once this is met, the HSA will pay for the medication in the concerned category as an adherence to the system.

There are certain sets of experts who differ on the possible benefits of these Health Savings Accounts in specific context of various users. If you as a user are interested to avail of the option of these HSAs, it is important that you carefully analyze the benefits and possible drawbacks of the system, in specific relevance to your needs, financial status and the desired results from the system.