There are many advantages to having a high-deductible insurance plan.
By JEAN FOLGER Updated October 30, 2022 Reviewed by KHADIJA KHARTIT Fact checked by YARILET PEREZ If this is the case, you may be qualified to open a Health Savings Account (HSA).
An HSA can be used in conjunction with a High-Deductible Health Plan (HDHP) to pay for medical expenses until the plan’s deductible is met and your healthcare coverage begins.
The Medicare Prescription Drug, Improvement, and Modernization Act established HSAs in 2003. Customers looking to control their healthcare expenses are increasingly turning to these savings accounts. They can also be used to save money that is exempt from taxes.
Important Takeaways: With an HSA, you can set aside money before taxes to pay for healthcare expenses that your insurance does not cover.
If you have a health plan with a high deductible that qualifies, you can open an HSA.
The maximum contributions for the 2022 tax year are $3,650 for individuals and $7,300 for families.
The maximum amounts for individuals and families in 2023 are $3,850 and $7,750, respectively.
You can contribute an additional $1,000 as a catch-up contribution if you are 55 or older.
There is no use-it-or-lose provision for five HSAs. At the end of the year, the plan can roll over any remaining funds indefinitely.
