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Posted on SEP 24, 2014

How a Health Savings Account Can Impact Your Health Care Choices

More Americans are enrolling in High Deductible Health Plans (HDHPs), as fewer companies are offering traditional employer‐subsidized, group coverage. Whether your health insurance is provided through an employer or purchased on your own, you may notice a growing selection of HDHP options available to you. These plans can help reduce healthcare costs through lower premiums, but they also require consumers to pay a greater share of their health care expenses.

A Health Savings Account (HSA) works in tandem with HDHPs, which generally cost less than traditional coverage. Employers like HSAs because they help lower healthcare costs, while maintaining quality health benefits. Individuals like HSAs because they can invest and grow their own money tax‐free and then control how that money is spent.

If you have a qualified HDHP and you're younger than age 65, you may be eligible to contribute to an HSA. An HSA works similar to a checking account, except the money you deposit to your HSA grows tax‐free over time. Contributions to an HSA and the account's earnings can be used tax‐free to pay premiums, co‐pays, deductibles and other expenses of the HDHP. Money can be deposited in your account via payroll deduction, a rollover from another HSA account or through a deposit at your local branch. For your convenience, you can withdraw funds and make payments with checks, a Johnson Bank HSA Visa® debit card or by managing your account online with eBanking.

2015 Annual HSA Contribution Limits

Contribution – Limited to the Amount Set by Law Add Catch‐Up Contribution Available for Ages 55 and Older Maximum Contribution Limit with Catch‐Up Contribution for Ages 55 or Older
Self‐Only Family Self‐Only Family
$3,350 $6,650 $1,000 $4,350 $7,650

HSA Account Benefits

HSAs are Portable: Unlike traditional plans, you can keep your account even if your marital status changes, you change jobs or you move.

Significant Tax‐Savings Advantages:

  • Your contributions are tax‐deductible or pre‐tax if made by payroll deduction. They're an ‘above‐the‐line’ deduction, so you do not have to itemize deductions to benefit.
  • Earnings are tax‐free.
  • Withdrawals for qualified medical expenses are tax‐free.

No ‘Use‐it‐or‐Lose‐it’ Conditions: Funds carry over each year, without limit, for long‐term growth potential.

Employer Contributions: Companies sometimes contribute to their employees' accounts.

It's easy to start an HSA. Contact a Johnson Bank advisor to learn more about health care choices and how an HSA can help you manage health care costs.