| What is a Health Savings Account† (HSA)? |
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An HSA is a advantaged savings account that is used in combination with a high deductible health insurance plan. The money in the account helps pay the deductible as well as any other qualified medical expenses—including coinsurance—that may not be covered by the plan once the deductible has been met.
An HSA is similar to an individual retirement account (IRA), because it too can be invested in a variety of investment vehicles, while accumulating tax-free interest. The advantage of an HSA compared to an IRA is that the funds from the HSA are generally not taxed when they are withdrawn to pay for qualified medical expenses.
| †Please be reminded that Health Savings Accounts (HSA) have tax and legal ramifications. Blue Cross and Blue Shield of Illinois does not provide legal or tax advice, and nothing herein should be construed as legal or tax advice. These materials, and any tax-related statements in them, are not intended or written to be used, and cannot be used or relied on, for the purpose of avoiding tax penalties. Tax-related statements, if any, may have been written in connection with the promotion or marketing of the transaction(s) or matter(s) addressed by these materials. You should seek advice based on your particular circumstances from an independent tax advisor regarding the tax consequences of specific health insurance plans or products. |
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