Health Savings Accounts

A Health Savings Account (HSA) is an alternative way to save for medical expenses and pay for health care costs. If your insurance policy is a High Deductible Health Plan (often referred to as an HDHP), you can save for qualified medical expenses – doctor visits, prescriptions, dental care and more – and do it tax-free.1

Key Features

  • No Monthly Fee
  • Tax-deductible contributions
  • Withdrawals for qualified medical expenses and dividends are both tax-free
  • No annual spending requirement
  • Debit card and checks for easy payment
  • Annual contribution limit for 2009: $3,000 for individual plans and $5,950 for family plans 2
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Certain conditions must be met before a Health Savings Account can be opened. Please see the U.S. Department of the Treasury HSA Frequently Asked Questions website for more details.

In 2009, you’re eligible if:

  • You have a high annual deductible of $1,150 or more for individuals and $2,300 or more for families (Or high annual deductible plus out-of-pocket expenses not to exceed $5,800 for individuals and $11,600 for families)
  • You don’t have another insurance plan with a low deductible health plan
  • You’re not enrolled for Medicare benefits
  • You’re not a dependent on another person’s tax return

1 Information on this page is not intended as tax advice. Please consult a tax professional for information specific to your situation. Contribution limits and high deductible health plan limits are revised each year to reflect cost-of-living increases.

2 If you reach age 55 before the close of the taxable year, you may also make a “catch-up” contribution. The 2009 catch-up contribution limit is $1,000.