r family needs health insurance coverage, but must manage their overall expenses for healthcare. They choose a policy with a high deductible level (required for an HSA) in order to reduce their monthly premium. But, they are carefulHealth Savings Accounts or HSAs are a new healthcare financing option introduced in 2004 that allows consumers to set up tax-deferred investment accounts tied to their health insurance policy and to use these tax-deferred funds to pay for incurred medical expenses. In essence, after setting up and funding an HSA in accordance with Federal and state regulations, you will be able to pay for many health-related expenses using pre-tax money. For most people, this is equivalent to receiving a 15% to 40% discount on qualified medical expenses! Consumers will realize even further savings by purchasing health insurance with a high deductible level -- a condition necessary to qualify for an HSA. In most cases, the benefits available under the HSA will offset the risk of that higher deductible level.

Let's look at how an HSA is normally established to better understand how this financial instrument works. An individual or family needs health insurance coverage, but must manage their overall expenses for healthcare. They choose a policy with a high deductible level (required for an HSA) in order to reduce their monthly premium. But, they are careful

ay for incurred medical expenses. In essence, after setting up and funding an HSA in accordance with Federal and state regulations, you will be able to pay for many health-related expenses using pre-tax money. For most people, this is equivalent to receiving a 15% to 40% discount on qualified medical expenses! Consumers will realize even further savings by purchasing health insurance with a high deductible level -- a condition necessary to qualify for an HSA. In most cases, the benefits available under the HSA will offset the risk of that higher deductible level.

Let's look at how an HSA is normally established to better understand how this financial instrument works. An individual or family needs health insurance coverage, but must manage their overall expenses for healthcare. They choose a policy with a high deductible level (required for an HSA) in order to reduce their monthly premium. But, they are careful

s equivalent to receiving a 15% to 40% discount on qualified medical expenses! Consumers will realize even further savings by purchasing health insurance with a high deductible level -- a condition necessary to qualify for an HSA. In most cases, the benefits available under the HSA will offset the risk of that higher deductible level.

Let's look at how an HSA is normally established to better understand how this financial instrument works. An individual or family needs health insurance coverage, but must manage their overall expenses for healthcare. They choose a policy with a high deductible level (required for an HSA) in order to reduce their monthly premium. But, they are careful

n most cases, the benefits available under the HSA will offset the risk of that higher deductible level.

Let's look at how an HSA is normally established to better understand how this financial instrument works. An individual or family needs health insurance coverage, but must manage their overall expenses for healthcare. They choose a policy with a high deductible level (required for an HSA) in order to reduce their monthly premium. But, they are careful

r family needs health insurance coverage, but must manage their overall expenses for healthcare. They choose a policy with a high deductible level (required for an HSA) in order to reduce their monthly premium. But, they are careful to select a plan that offers an attached HSA with the policy. Each tax year, this individual or family contributes funds into their HSA as follows (2006 rates): singles - $2700; families - $5450; and persons over 55 - an additional $700 per person. The actual contribution amount is claimed as a deduction against gross income on their tax return, reducing the amount of taxable income by an equal amount, even if they do not itemize deductions. The money in the HSA receives tax treatment similar to an IRA, and the investment growth of the money is not taxable while it remains within the account. At any time, money in the HSA can be withdrawn as needed to pay medical expenses without ever paying taxes or penalties. Finally, upon a person reaching the age of 65, HSA money can be withdrawn or spent for any purpose without penalty or taxes.

Another exciting advantage of an HSA is the wide array of medical expenses con