INSURANCE

Q:What is an HSA and how does it work? Can I get one if I’m on Medicare?

A:A health savings account (HSA) is a tax-advantaged medical savings account. It is an option for those who are enrolled in a high-deductible health plan (HDHP). HSAs are a good way to save money for medical expenses and reduce your taxable income. The general idea is people with HSAs will pay for routine and relatively low cost medical expenses with funds from their HSA while relying on insurance to cover serious illnesses and catastrophes. Contributions to an HSA are tax-deductible or pre-tax if the plan is administered by an employer. For 2018, the contribution limit for self-only HSAs is $3,450 per year. The contribution limit for family coverage HSAs is $6,900 per year. If you’re age 55 or older, you can make an additional $1,000 catch-up contribution to your HSA. You qualify to contribute to an HSA if: • You are not on Medicare or covered by another health plan that is not HDHP. • You cannot be claimed as a dependent on someone else’s tax return

• You are enrolled in a high deductible health insurance plan (HDHP) as defined by the government. Once you set up an HSA and begin making contributions, you will be provided with a debit card or checks that give you immediate access to your account to pay for eligible medical expenses. You can use your HSA to pay for deductibles, copays and coinsurance, plus other qualified medical expenses not covered by your insurance plan. You decide what to buy, where to buy it, and how much to pay. You also decide how much to contribute to your account up to the maximum allowed by law. Unlike a Flexible Spending Account (FSA) your HSA balance rolls over from year to year, so you never have to worry about losing your savings. HSAs can be invested in stocks, bonds, mutual funds and a wide variety of other investment choices. Any interest or other earnings grow tax-free. Once you are over age 65 and enrolled in Medicare, you can no longer contribute to an HSA, but you can still use the money in your account for out-ofpocket medical expenses. The regulations and guidelines for HSAs are complex. For detailed information please go to www.irs.gov. For more information on the individual, group health insurance plans, Medicare Supplements or Medicare Advantage Plans, call me at 440255-5700 or email your question to Lmutsko@mutskoinsurance.com. I’m here to help.

Laura Mutsko Mutsko Insurance Services, LLC

6982 Spinach Drive, Mentor, OH 44060 440-255-5700 www.mutskoinsurance.com

Laura Mutsko Agent, CSA and Certified Healthcare Reform Specialist