The cost of healthcare continues to climb. Are you frustrated with higher premiums and out-of-pocket costs? You are not alone. You may be looking for new strategies to handle these expenses. If you have not considered a Health Savings Account (HSA) before, now may be the time. Here are 3 questions to ask to determine if an HSA is right for you.
1: Who is eligible to have HSA? To be eligible to make an HSA contribution, under the current rules you must be covered by a high deductible health plan (HDHP). The rules are very specific about what plans qualify. Here are the details for 2024:
| Year | Self-Only HDHP Minimum Deductible | Self-Only HDHP Maximum Out-of-Pocket Expenses | Family HDHP Minimum Deductible | Family HDHP Maximum Out-of-Pocket Expenses |
| 2024 | $1,600 | $8,050 | $3,200 | $16,100 |
If you have questions as to whether your plan qualifies, you should ask your employer or health insurance provider. You cannot contribute to an HSA once you are enrolled in Medicare. However, you can keep your existing HSA and you can still take tax-free distributions for qualified medical expenses.
2: How do the HSA contribution rules work? Your contribution limit will depend on your age and the type of health insurance you have. The HSA contribution limits are indexed for inflation. Here are the limits for 2024:
| Year | Self-Only HDHP under age 55 | Self-Only HDHP age 55+ | Family HDHP under age 55 | Family HDHP age 55+ |
| 2024 | $4,150 | $5,150 | $8,300 | $9,300 |
There are currently no income limits for HSA contributions, and you do not need to have earned income to contribute. If you make an HSA contribution, you may deduct that contribution regardless of how high your income is and regardless of whether you take the standard deduction or itemize deductions on your tax return.
3: How do the HSA distributions rules work? You can take tax-free distributions from your HSA for qualified medical expenses, including those of a spouse or dependent. This is true even if your spouse or child is not covered under the HSA compatible HDHP. You can take a tax-free distribution from an HSA to reimburse yourself for qualified medical expenses in prior years as long as the expenses were incurred after you established your HSA and you have proof of those expenses.
Specializing in private wealth management, we provide education, guidance, and strategies to help you achieve a tax-efficient retirement income.
Specializing in private wealth management, we provide education, guidance, and strategies to help you achieve a tax-efficient retirement income.
Investment advisory services offered through Donato Wealth Management, PLLC, dba Empower Wealth Management and Empower Wealth & Tax (“Empower Wealth Management” or “EWM”),
an SEC registered investment adviser that only conducts business in jurisdictions where it is properly registered, or is excluded or exempted from registration requirements. Registration as an investment adviser is not an endorsement of the firm by securities regulators and does not mean the adviser has achieved a specific level of skill or ability. The firm is not engaged in the practice of law or accounting.
The information presented is believed to be current. It should not be viewed as personalized investment advice. All expressions of opinion reflect the judgment of the authors on the date of publication and may change in response to market conditions. You should consult with a professional adviser before implementing any strategies discussed. Content should not be viewed as an offer to buy or sell any of the securities mentioned, or as legal or tax advice. You should always consult an attorney or tax professional regarding your specific legal or tax situation. Personal investment advice can only be rendered after the engagement of EWM, execution of required documentation, and receipt of required disclosures. All investment and insurance strategies have the potential for profit or loss. Asset allocation and diversification will not necessarily improve an investor’s returns and cannot eliminate the risk of investment losses. Past performance is no guarantee of future results. For more information, please go to https://adviserinfo.sec.gov and search by our firm name or by our CRD #305031.
Insurance products and tax services are offered through Senior Tax and Insurance Advisors, PLLC, dba Empower Wealth Group (“Empower Wealth Group” or “EWG”). Any comments regarding safe and secure investments and guaranteed income streams refer only to fixed insurance products. They do not in any way refer to investment advisory products offered through EWM. Rates and guarantees provided by insurance products and annuities are subject to the financial strength of the issuing insurance company; not guaranteed by any bank or the FDIC. EWG is not affiliated with or endorsed by the U.S. Government, Social Security Administration, nor the federal Medicare program. You may be contacted by a licensed insurance agent. Calling the number above will direct you to a licensed insurance agent. EWG may not offer every plan available in your area. Any information provided is limited to plans available in your area. Please contact Medicare.gov or 1-800-MEDICARE.
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We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area. Please contact Medicare.gov or 1-800-MEDICARE to get information on all of your options.
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