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Top 10 HSA Advantages

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Tax Savings - You can deduct your HSA deductions from your gross income on your

federal tax return, even if you do not itemize deductions. Many states also allow the deduction from

state income taxes.Earned Interest - Funds in your HSA grow with tax-deferred

interest.Portability - You own your account, so even if you change jobs, your

HSA funds go with you.Affordable Health Coverage - Use your Health Savings Account to

cover 100% of the cost of routine medical expenses like office visits, lab tests, and over-the-counter drugs.

Reduced Insurance Premiums - Your insurance premiums can be substantially lower when you change from a low-deductible plan to a high-deductible plan.Long-Term Savings - Because your funds can roll over from year to year, you can let the funds in your account grow tax-deferred. That's why HSAs have been referred to as the "Medical IRA."Retirement Bonus - After age 65, you may make withdrawals from your HSA for any reason without the 10% penalty imposed before age 65 for non-medical withdrawals. (Note: you'll still have to pay taxes on the money.)

Safety Net - There is no "use it or lose it" provision, so you can build up the savings in your HSA to use for major health events.

Coverage for the "Extras" - You can also use your HSA funds for programs not usually covered by other health plans, including dental,

optical, and much more.Empowerment - Take control of your routine healthcare decisions

you get to choose the healthcare and providers that you want.

Health Savings Accounts (HSA) are individually owned, tax-preferred savings accounts that can be funded to help offset eligible medical expenses or accumulated over time to supplement retirement savings. To have contributions made to an HSA, the account owner must have a qualifying High Deductible Health Plan in place. Not all high deductible plans meet this criteria.

Here a few key features of an HSA -

• HSAs must have a minimum deductible – In 2010 they these are set as $1,200 for individuals or $2,400 for families, indexed annually.• HSAs are employee-owned accounts – the full account balance moves with you if you leave employment.• HSA contributions can come from several sources – employer, employee-pretax payroll deduction, lump-sum, or any combination.• All HSA contributions are pre-tax and earnings accumulate tax-free or tax-deferred depending on how the money is spent.• HSA accumulations can be used tax-free for any IRS qualified medical expense, such as health plan deductibles and other out-of-pocket costs, dental, orthodontia, lasik surgery, over-the-counter medications, and more. • HSAs can accumulate year-over-year – there is never a threat of losing unspent balances.• For account owners 55 and older, additional “catch-up” contributions can be made.• HSAs have limits on contributions in any given calendar year – for 2010 they are $3,050 for individuals and $6,150 for families.• HSAs allow non-medical expense distributions, but account owner will be taxed and penalized (10%) on the funds withdrawn.• Early withdrawal penalty goes away for account owners 65 and older.

Why Choose an HSA?

HSA's provide a means for individuals and families

to take control of their health care plans.

Premium savings and other contributions

allow you to “self-insure” the small

expenses while maintaining high quality

catastrophic coverage for large claims –

if they occur!

• 100% of employee contributions are

free from federal, state (if applicable),

and other payroll taxes.

• Employer contributions, if any, are

free from taxation.

• Your HSA account can be invested

similar to a 401k and all earnings

grow tax-free or tax-deferred

depending on how the money is

eventually spent.

• You pay no taxes or penalties when

you use the money for qualified

expenses at anytime.