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Health Savings Accounts

Life has its surprises but paying for qualified medical expenses does not need to be one of them.


Have a High Deductible Health Plan (HDHP)?

Consider an AVB Health Savings Account (HSA).

A Health Savings Account (HSA) is a specialized savings account that works hand-in-hand with your employer-sponsored high deductible health insurance plan (HDHP), allowing greater flexibility over how you use your health care dollars. Created by Congress to help combat rising healthcare costs, a HSA is similar to an IRA but is used exclusively to cover medical expenses.
A High Deductible Health Plan (HDHP) is an insurance policy usually maintained by sole proprietors or the self-employed. The current HDHP limit is $1,600 for an individual annual deductible and $8,050 for annual out-of-pocket expenses. The family limits are $3,200 for the annual deductible and $16,100 for annual out-of-pocket expenses.

Qualified individuals may open an HSA at AVB Bank and make pre-tax* contributions to the account that grow in the same manner as an IRA. Distributions are tax-free* if the proceeds are used for qualified medical expenses.

*Consult with your tax advisor.

  • Single: $4,150
  • Family: $8,300
  • Catch-up Contributions: $1,000 for an account holder age 55 or older
  • Out-of-pocket expenses include deductible, co-payments, and other amounts, but not premiums
*Consult with your tax advisor.

Withdrawals can be made for medical expenses tax-free. After age 65, funds may be withdrawn for any reason without penalty, and medical expense withdrawals continue to remain tax-free.

*Consult with your tax advisor.

  • Individuals who participate in High Deductible Health Plans (HDHPs)
  • Individuals who are not currently covered by any non-HDHP
  • An individual who is not currently enrolled in Medicare or claimed as a dependent on someone else’s tax return
*Consult with your tax advisor.
  • Funds roll over year to year
  • HSAs are portable
  • Employers can save on health care costs
  • HSAs allow greater flexibility over how you use your health care dollars
  • By law, you must enroll in an HDHP to be eligible for an HSA
*Consult with your tax advisor.
  • Dental treatments such as fillings or braces
  • Hearing aids, including batteries
  • Prescription drugs
  • Over-the-counter (OTC) drugs (accompanied by a prescription)
  • Eye exams, eyeglasses and contact lenses
  • Premiums for qualified long-term care insurance
  • Out-of-pocket expenses including deductibles, co-insurance and co-payments
  • Acupuncture
Individuals who establish HSAs should maintain records of medical expenses to show distributions have been made exclusively for qualified medical expenses should the IRS request them.

*Consult with your tax advisor.
HSAs can provide you with significant tax benefits* not only related to paying qualified medical expenses, but also those similar to many retirement plans. Any unused HSA assets may be used for retirement with the HSA earnings tax-deferred. 

*Consult with your tax advisor regarding tax benefits.