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Health Savings Accounts What Is A Health Savings Account How Will I Save Money With An HSA How Can I Fund My HSA What Can I Use My HSA Funds For How To Set Up Your HSA Account
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How Can I Fund My HSA?

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The money to fund your Health Savings Account (HSA) can come from refinancing your current health insurance. Switching to a higher deductible health plan from a traditional low deductible health plan will cut the cost of your health plan substantially. You deposit the savings gained into your HSA. The whole point of a health savings account is to allow you to use that money on a tax-free basis to pay for your health expenses below your new, higher deductible.

Contributions to your HSA can be made by the you (the account holder), a third party on behalf of the account holder and/or by an employer; however, the money in your HSA is your own. No one can tell you what to do with your own money or restrict what you can spend it on. And since it's your account, it goes with you when you change jobs. You are in charge of your HSA funds and you decide whether to spend from the account for your medical expenses and how much to spend, or whether to spend out-of-pocket and save the HSA money for the future.

Your annual HSA deposit can never exceed the maximum allowable deposit, unless you are 55 or older and are making "catch up" contributions. The maximum amount you can contribute for 2007 is $2,850 for individual coverage and $5,650 for family coverage, excluding catch up contributions for those 55 years and older. These amounts are indexed annually for inflation.

You can fully fund your HSA account on day one of your qualifying high-deductible health plan being in effect, provided you do not exceed the maximum amount. You can make deposits anytime after your HSA is open. If you cancel your high-deductible health plan later in the year, you will have to withdraw some of the contribution from the account.