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3 Advantages to Opening a Health Savings Account (HSA)

posted on Friday, March 9, 2018 in Education

Today, rising healthcare costs is the No. 1 issue facing many individuals and families in the United States.

A mother and child with a doctor looking at a chart image

At Northwest Bank, we offer a Health Savings Account (HSA) to help with those costs. This type of savings account is for eligible individuals on a high-deductible healthcare plan. HSAs have several tax advantages, and all funds in the account can be used to pay for qualifying medical, dental and vision expenses. 

Learn More About a HSA Account

Some of those tax advantages1 include:

  1. Contributions to your Health Savings Account are 100% tax-deductible up to the annual limit, just like an IRA. Those limits for 2018 are $3,450 for an individual, $6,850 for a family and adults over the age of 55 can add up to $1,000 more.
  2. HSAs accumulate interest over the years tax deferred, allowing you to decide when to spend and when to save. And, any money left in the savings account is yours to keep year over year, unlike a Flexible Spending Account (FSA), which is "use it or lose it."
  3. Withdraws are tax free as long as they are used for a qualifying medical expense, even in retirement. Below is a list of qualifying medical expenses:

Qualifying Medical Expenses2

  • Chiropractic/Physical Therapy
  • Dental & Optical
  • Prescription Drugs
  • Medical Equipment
  • Nursing & Doctor Services
  • Alcohol/Drug Treatment
  • Prescribed Weight Loss
  • Emergency Care

If you are on a high-deductible plan or expect to move to one next year, please contact one of our personal bankers about opening an HSA. By establishing a HSA and having a High Deductible Health Plan, you are taking health care savings back into your own hands to help you make the decisions that are right for you!

1See your accountant for more IRS details
2Not limited to these medical expenses.
Based on Tax Year 2018 IRS Limits. Source: 

Product availability may vary by Northwest Bank location.

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