Self-directed health savings account.
A new option to reduce your health care costs is the combination of a high deductible health plan (HDHP) and a health savings account (HSA). To qualify for an HSA, you must have an HDHP. The HDHP is a health insurance policy that features a higher annual deductible than traditional health plans.
HSAs were created to help individuals and families save for qualified medical expenses on a tax-free basis. An HSA can be used for medical expenses, such as prescriptions, eye care, dental and some over-the-counter medications. The funds contributed to your HSA are tax-deductible, reducing your taxable income. Most HSAs provide only savings or money market accounts, limiting what your HSA can earn. With an Preferred Trust self-directed HSA, you can self-direct your funds into real estate, mortgages, limited partnerships, mutual funds and more. You have complete control and may direct your funds into investments that you know offer maximum growth, ensuring financial security for when you need it the most. Unlike a Flexible Spending Account (FSA), an HSA is not a "use it or lose it" account.
Should You Consider a Health Savings Account? Yes, if you meet the following conditions:
- You have a high-deductible health plan.
- You are generally not covered by any health plan that is not a high- deductible plan.
- You are not enrolled in Medicare.
- You may not be claimed as a dependent on another person’s tax return.
How Much Can You Contribute? The amount you can contribute depends on whether you’re contributing on behalf of yourself or your family.
