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Redefining Health Savings
In this episode, Dan & Ian help clarify the confusion surrounding Health Savings Accounts (HSA). Also, they dive deep into the requirements and contribution limits to the plan. Furthermore, they explore Flexible Spending Accounts (FSA) which allow for another option of healthcare savings. Below there is an outline of the episode and further information regarding health savings.
KEY POINTS: Health savings accounts (HSAs)
-Are like personal savings accounts, but the money in them is used to pay for health care expenses. You — not your employer or insurance company — own and control the money in your HSA. The money you deposit into the account is not taxed.
-To be eligible, you must be enrolled in a High-Deductible Health Plan (HDHP). Contributions to HSAs generally aren't subject to federal income tax, and the earnings in the account grow tax-free.
-Contributions can come from you, your employer, a relative, or anyone else who wants to add to your HSA. The IRS does, however, set limits. In tax year 2020, for example, the limit is $3,550 for individuals and $7,100 for families, plus an additional $1,000 "catch-up" contribution for anyone age 55 or older by the end of the tax year.
KEY POINTS: Flexible Spending Account (FSA)
-Same thing as HSA, except you do not need to be part of HDHP
-Employee of an employer who sponsors the plan
-Can be used for additional medical expenses not covered or explicitly mentioned in HSAs
-Limited to $2,750 per yr per employer
-Spouse can contribute $2,750 to their own as well
-HSAs are more flexibility than Flexible Spending Accounts (FSAs), which can only be carried over in an amount up to $500 or 2.5 months into the following plan year
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By With Dan & IanIn this episode, Dan & Ian help clarify the confusion surrounding Health Savings Accounts (HSA). Also, they dive deep into the requirements and contribution limits to the plan. Furthermore, they explore Flexible Spending Accounts (FSA) which allow for another option of healthcare savings. Below there is an outline of the episode and further information regarding health savings.
KEY POINTS: Health savings accounts (HSAs)
-Are like personal savings accounts, but the money in them is used to pay for health care expenses. You — not your employer or insurance company — own and control the money in your HSA. The money you deposit into the account is not taxed.
-To be eligible, you must be enrolled in a High-Deductible Health Plan (HDHP). Contributions to HSAs generally aren't subject to federal income tax, and the earnings in the account grow tax-free.
-Contributions can come from you, your employer, a relative, or anyone else who wants to add to your HSA. The IRS does, however, set limits. In tax year 2020, for example, the limit is $3,550 for individuals and $7,100 for families, plus an additional $1,000 "catch-up" contribution for anyone age 55 or older by the end of the tax year.
KEY POINTS: Flexible Spending Account (FSA)
-Same thing as HSA, except you do not need to be part of HDHP
-Employee of an employer who sponsors the plan
-Can be used for additional medical expenses not covered or explicitly mentioned in HSAs
-Limited to $2,750 per yr per employer
-Spouse can contribute $2,750 to their own as well
-HSAs are more flexibility than Flexible Spending Accounts (FSAs), which can only be carried over in an amount up to $500 or 2.5 months into the following plan year
Follow & Subscribe to The Small Business Experience:
Youtube: https://www.youtube.com/channel/UCgCgrWab2pDhnQ3pZvbI0Zw
Instagram: https://www.instagram.com/smallbusinessexperience
Facebook: https://www.facebook.com/The-Small-Business-Experience-101691538462054
Twitter: https://twitter.com/TheSmallBizExp
LinkedIn: https://www.linkedin.com/company/70527961/admin/
Buzzsprout: https://thesmallbusinessexperience.buzzsprout.com