HSA stands for a health savings account, which is an account that is free from taxes that you can use to cover health-related costs. In order to be eligible for an account, you must already have an existing high deductible health plan, or an HDHP. Additionally, you must not be involved in Medicare, nor should you be a dependent on someone else’s tax return. You are free to set up your HSA on your own, but you also have the option to have your employer do so for you.
To maintain a health insurance plan, you have to in turn maintain your deductible, which is basically an amount that must be paid in order to take care of health-related expenses before the insurance company takes over.
As of 2018, an insurance plan is counted as high-deductible if the given minimum amount to pay every year is $1,350 for coverage of one’s own self exclusively. As for family coverage, the minimum would be $2,700. As for the maximum amount of deductible, added up with any necessary additional expenses, must not go beyond $6,650 for self-only coverage, and must not exceed $13,300 for family.
If you have passed all the needed requirements in order to be able to secure an HSA, you may be allowed to provide up to $3,450 for self-coverage, as well ass $6,900 for family. That is the standard exclusive to the year 2018. If by the end of the year, you’ll have turned 55 or older, you can then make an additional contribution of $1,000 to your account. You may be offered the privilege of receiving an employment benefit, in which case, your employer may provide on your behalf. However, your employers must still stay within the given limit.
Keeping your savings in a health savings account in the long run and investing them wisely will largely aid you in expanding your finances, as well as securing your plans for retirement. It is very likely that after you have retired, you will receive less income and garner greater health costs—this makes the money in your tax-exempt HSA account quite a practical asset.
For more details and everything else you need to know about the HSA Guidelines 2018.