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Health Savings Accounts

Elder Law is about understanding resources and tools available to you. The number of H.S.A. accounts increased by 16 percent year over year as of June 30, to more than 21 million. Assets held in the accounts grew 23 percent, to just under $43 billion. Contributions can be deducted pretax from your paycheck, lowering your taxable income; any interest or investment gains on the money is tax free; and withdrawals from the account are tax free, as long you spend the money on eligible items. And if you change jobs, the H.S.A. moves with you. 

The savings accounts are available only with certain health insurance plans meeting specific criteria, like high deductibles - at least $1,300 for an individual and $2,600 for a family. (A deductible is the amount you pay for care before your health plan pays.)

The Employee Benefit Research Institute, which tracks a database of 5.5 million health savings accounts totaling $11.3 billion as of the end of 2016, found that H.S.A.-eligible health insurance plans covered nearly three in 10 employees last year.

High-deductible health plans typically have cheaper monthly premiums - but you'll pay more out of pocket for care. The H.S.A. is meant to help cover those costs. 

You can set aside as much as $3,400 for an individual, or $6,750 for a family, in an H.S.A. You can leave the money in a basic, interest-bearing savings account or, in some cases, invest the money - just as you would with a 401(k) retirement account - for the long term. 

H.S.A. funds can be used for a variety of health care and expenses, including co-payments, prescriptions, dental work and braces. If you are self empolyed you can use this account as long as your medical insurance plan meets the criteria. The money you contribute is tax-deductible, even if you do not itemize deductions on your tax return. You can open an account through a bank or through a company that specializes in them. 

Read more about this in the New Times in an article written by Ann Carrns at


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