Early fall of 2023 is the first in recent memory where I am happy to see pumpkin spice and Halloween decorations already on display as it signals cooler weather. We might all be feeling the inflation pinch these days now that another summer season has come and gone. With this change, comes new projects. As healthcare costs continue to rise, it’s worth taking the time to determine if you qualify for a Health Savings Account, commonly referred to as an HSA. An HSA is a special savings account that operates like a checking account, enabling you to set aside funds on a pre-tax basis to use for qualifying medical expenses1.
To qualify for an HSA, you must be subject to a High Deductible Healthcare Plan (HDHP). As defined by regulations for 2023, the minimum deductible is $1,500 for an individual plan and $3,000 for a family plan. As an individual, you can contribute up to $3,850 and $7,750 for family plans. Keep in mind, the income tax year 2023 contributions can be made until April 15, 2024, giving you additional time to research your maximum benefits.
The IRS released adjustments to these figures for 2024, with the HDHP requirements of $1,600 for individuals and $3,200 for family health insurance plans in place after January 1, 2024. The annual contribution limits are $4,150 for individuals and $8,300 for family plans.
An attractive feature of an HSA is unused funds roll over each year and is not forfeited, unlike a flexible spending account. Contributions to an HSA can be made until the eligible owner reaches age 65 or when they enroll in Medicare Part A, B, or D. Additionally, interest earned on an HSA are generally not taxable. When you consider the cost of annual deductibles, copayments, and qualifying medical expenses, you could reduce the cost of your health care coverage.
NDBT is your local community bank, and we are here to help you achieve your financial goals. We have proudly offered HSA accounts for many years and our skilled bankers can help you get started today. Feel free to stop by any of our five banking centers. You can also book an appointment on our website. Member FDIC
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