Health Savings Accounts (HSAs) give U.S. taxpayers enrolled in many high deductible health plans a unique way to save for certain healthcare costs.
HSA funds are not subject to federal income taxes. You can use them to pay for qualified medical expenses at any time—without incurring federal tax liabilities or penalties. You can also invest them to earn interest on your balance. Any unused funds will accumulate year to year.
How it works
Enroll in a high deductible health plan eligible for a Health Savings Account (HSA). HealthSource RI offers a variety of these plans, which you’ll find listed below in the FAQ section.
Open and activate an HSA with an IRS-qualified trustee. Be sure to find out if your trustee has a minimum balance requirement.
Make contributions to your HSA as you see fit—without exceeding your annual contribution limit. You can also invest your HSA funds in financial opportunities offered through your trustee.
Use your trustee’s preferred payment method—such as a debit card and/or checks—to pay for qualified medical expenses. Save all your receipts and complete the necessary tax forms to claim your deductions (IRS Form 8889).