You are eligible to put pre-tax deductions into a Health Savings Account (HSA) if you have coverage under the high deductible health plan that the Village of Ashwaubenon offers.
HSA Eligibility
- You cannot have other health insurance
- Are not enrolled in Medicare
- Cannot be claimed as a dependent on someone else’s tax return
Saving with an HSA
HSA’s serve as a tax-advantaged fund that can be used to pay for current or future medical expenses. You control your account. If the funds are not used, the money will roll over to the next year and continue to grow over time. These funds grow through the accrual of tax-free interest, and in some cases, you may be able to invest a portion of your HSA and earn tax-free investment earnings.
HSA Advantages
- Your HSA can provide a savings buffer for unexpected or high medical bills
- You can use your HSA to pay for current medical expenses including your deductible and expenses that your insurance may not cover
- You can save your funds for future medical expenses such as:
- Health insurance or medical expenses if unemployed
- Medical expenses after retirement (before Medicare)
- Out-of-pocket expenses when covered by Medicare
- Long-term care expenses and insurance
Portability
- Your HSA is yours even if you change jobs or change your medical coverage
- Funds remain in the account from year to year, just like an IRA
- There are no “use it or lose it” rules, making it a great way to save money for future medical expenses
- You can withdraw your money from your HSA at any time and for any reason
- If your money is not used for medical expenses, you will have to pay income tax on your withdrawal
- You will also have to pay a 20% additional tax, unless the withdrawal is made after you attain age 65, become disabled or after your death
2024 IRS HSA limits
- Individual $4,150
- Family $8,300
- Catch-up contribution up to $1,000 for those age 55 or older
