Health Savings Accounts were created by Congress to combat rising medical costs by providing an incentive for consumers to pay “first-dollar” medical expenses. A Health Savings Account is an account that is designed exclusively for covering medical expenses incurred by the HSA owner, spouse, or dependent children. These accounts are available to individuals covered by a high deductible health plan regardless of whether the person is self-employed or employed by a small employer. HSA’s can provide significant tax benefits to eligible individuals and may also provide benefits similar to retirement plans. Assets may be withdrawn and used for qualified medical expenses including doctor visits, prescriptions, dental care, transportation for medical care, long-term care insurance & healthcare coverage when unemployed.
Contribution limits are adjusted each tax year. "Catch-up" contributions are available for individuals age 55 or older. 2013 contribution limits are $3250.00 for single and $6,450.00 for family with $1,000.00 catch up for age 55 and over.
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