Be familiar with values of Health Savings Accounts
Since 2004 Health Savings Accounts (HSAs) have been available to help save and pay for health care costs. They work with high deductible health insurance and are known for their triple tax benefits. Contributions can be deducted from income. Earnings are tax deferred while in the HSA account and, if HSA funds are used for qualified medical expenses, both the contributions and earnings are tax-free when distributed. Below are 5 other benefits of an HSA:
1. There are no income limits for contributions and you do not need to have earned income to contribute. If you have HSA compatible high deductible health insurance, you can make an HSA contribution for the year. No one makes too much to contribute and, unlike an IRA, there is no requirement that you have earned income to be eligible.
2. If you make an HSA contribution, currently you may deduct that contribution regardless of how high your income. Everyone who is eligible to make an HSA contribution can deduct it. The income limit never phases out.
3. You can take tax-free distributions from your HSA for qualified medical expenses, including expenses of your spouse or dependent. This is true even if your spouse or dependent child is not covered under a HSA compatible high deductible health insurance. Your HSA can benefit your family members.
4. You can take a tax-free distribution from an HSA to reimburse yourself for qualified medical expenses in prior years as long as the expenses were incurred after you established your HSA, and you have proof of those expenses. There is no requirement the expenses and the HSA distribution take place in the same year. In fact, the distribution could happen many years later and still be a qualified tax-free distribution from the HSA.
5. You cannot contribute to an HSA once you are enrolled in Medicare. However, you can keep your existing HSA and you still can take tax-free distributions for qualified medical expenses. Many individuals are unaware of these rules and mistakenly believe you cannot keep your HSA once you enroll in Medicare. You can keep it and continue to tap it to pay medical bills.
Enrollment in HSAs are rising as more people become aware of the benefits. As always before you make important financial decisions consult with competent tax, legal and financial professionals.



Equal access to health care can be a reality
Opinion | Policy holders benefit under new flood insurance rating
Advisor News
- Health-related costs are the greatest threat to retirement security
- Social Security literacy is crucial for advisors
- The $25T market opportunity in mid-market and mass-affluent households
- Advisors must lead the policy risk conversation
- Gen X more anxious than baby boomers about retirement
More Advisor NewsAnnuity News
- CT commissioner: 70% of policyholders covered in PHL liquidation plan
- ‘I get confused:’ Regulators ponder increasing illustration complexities
- Three ways the Corebridge/Equitable merger could shake up the annuity market
- Corebridge, Equitable merge to create potential new annuity sales king
- LIMRA: Final retail annuity sales total $464.1 billion in 2025
More Annuity NewsHealth/Employee Benefits News
- Audit: State gave millions in erroneous benefits for health plan
- Virginia orders rate cuts for Aflac policies
- Dover Schools seek relief in court for lapse in coverage
- CalOptima to reinstate Prime Healthcare hospitals back into its OC network
- Miami-area man’s $48,000 cancer treatment was denied by his insurer. He’s suing
More Health/Employee Benefits NewsLife Insurance News
- Virginia orders rate cuts for Aflac policies
- QANDA WITH OBI BOARD CHAIR JUSTIN DELANEY
- Aflac to cut rates for Virginia policyholders after SCC findings
- Greg Lindberg ordered to pay $1.6 billion to insurers he defrauded
- New Research Highlights Critical Gaps in Medicare Planning and Opportunities for Financial Professionals
More Life Insurance News