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 2010: $3,050 for individual plans and $6,150 for family plans 2
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 2010, you’re eligible if:
- You have a high annual deductible of $1,200 or more for individuals and $2,400 or more for families (Or high annual deductible plus out-of-pocket expenses not to exceed $5,950 for individuals and $11,900 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 and later catch-up contribution limit is $1,000.

