Health Savings Accounts (HSAs) grow like investment accounts and can be extraordinarily helpful if you incur significant medical expenses in the future. However, not everyone can get an HSA. Only certain individuals can open HSAs, and the funds disbursed from them are only tax-free if used for specific medical costs. If you’re interested in saving on taxes and medical expenses, an HSA might be the best plan for you.
What Are The Requirements For Getting An HSA From Secure Insurance Group?
Not everyone can enroll in an HSA from Secure Insurance Group. In order to get an HSA, you need to have a high-deductible health plan (HDHP). The IRS sets the guidelines of what qualifies as an HDHP. In 2023, an HDHP has a minimum deductible of $1,500 for individuals and $3,000 for families. The HDHP must also have an out-of-pocket maximum of $7,500 for individuals and $15,000 for families.
You can’t have any other health insurance policy alongside your HDHP, nor can you be claimed as a dependent on another person’s taxes. If you have another policy or if you’re considered a dependent, you can’t open an HSA.
Why Are HSAs From Secure Insurance Group Considered Tax Advantaged?
HSAs, whether they come from Secure Insurance Group or another insurer, are tax-advantaged because they grow tax-free, and your contributions to your HSA can be deducted from your income taxes (as long as you’re within the annual contribution limit). The funds in HSAs can be invested in stocks or other securities for added growth. This additional growth is not subject to taxes.
Withdrawals are tax-free, too, but that is under the condition that you use the funds from withdrawals to pay for qualified medical expenses. Examples of qualified medical expenses include dental work, vision care, psychiatric care, prescriptions, and copayments for office visits.
What If I Withdraw Funds From My HSA To Pay For Non-Medical Expenses?
Withdrawing funds to pay for anything other than a qualified medical expense will be taxed heavily. If you do this, what you withdrew will be treated as your taxable income, and you’ll face an additional 20% tax penalty. However, if you’re 65 or older and withdraw from your HSA to pay for something other than a qualified medical expense, you’ll pay income tax on the withdrawal, but not the added 20% tax penalty.
How Will Signing Up For Medicare Affect My HSA?
Once you have Medicare, you can no longer contribute to your HSA, and you won’t be able to open a new HSA, either. However, you can still use funds from your HSA to pay for your qualified medical expenses just as you had done before. You may also use those funds to pay your Medicare premiums without facing a tax penalty. It should be noted that you will have to pay income taxes on withdrawals from your HSA if you use the funds to cover Medicare Supplement Plan (Medigap) premiums.
Find Your Policy Today
At Secure Insurance Group, we want to help you capitalize on all opportunities so that everything you need in the future will be more affordable. This includes your healthcare. If you’re ready to save with excellent health insurance coverage, call us today at 877-871-7328.
