HEALTH SAVINGS ACCOUNT (HSA)
Health Savings Accounts (HSAs) were created by Congress to allow individuals to pay for health expenses on a tax-free basis. It is an alternative to traditional health insurance; it is a savings product that offers a different way for consumers to pay for their health care. HSAs enable you to pay for current health expenses and at the same time save for future qualified medical health expenses on a tax-free basis.
In order to take advantage of a HSA, you must also be covered by a High Deductible Health Plan (HDHP). An HDHP generally costs less than what traditional health care coverage costs, so the money you save can then be placed into a Health Savings Account.
You own and you control the funds in the HSA. Decisions on how to spend the money are made by you without relying on a third party or a health insurer (limitations do exist with purchases made with a debit card).
Money in your HSA can be saved tax-deferred until you retire. Once you reach the age of 65, funds can be used tax-free for medical expenses, or used for any other purpose, subject to being reported on your taxes as income, similar to other retirement accounts, such as IRAs, you may have.
For more information regarding Health Savings Accounts, visit The Wilton Bank's HSA Center. Here, you can learn more about HSA accounts, see if you qualify to open one or even fill out paperwork to open an account (the paperwork will have to be brought to the bank for account establishment).