Health Savings Account Advantages
A health savings account (HSA) gives you great tax advantages. If you choose, you can put money into your health savings account through payroll deduction pre-tax.
Withdrawals taken out of your health savings account to be used for qualified medical expenses, including dental and vision, are never taxed.
Interest earnings accumulate tax-deferred, and if used to pay qualified medical expenses, are tax-free.
Unlike Flexible Spending Accounts, HSA’s are not use it or lose it accounts. Any unused funds that are not used at the end of each year roll over to the next year.
Maximum contribution amounts for 2020 are $3,550 for employee only and $7,100 for families. The annual “catch- up” contribution amount for individuals age 55 or older will remain $1,000.
Maximum HSA contribution amounts for 2021:
$3600 Employee
$7200 Family
The annual “catch- up” contribution amount for individuals age 55 or older will remain $1,000.