Health Savings Accounts
 
Use pre-tax dollars to pay for health insurance premiums and co-pays

A Health Savings Account (HSA) or Health Care Reimbursement Account (HCRA) is a type of Flexible Spending Account (FSA). These accounts can be used to pay for certain health care expenses with pre-tax dollars. Eligible expenses must be paid for the diagnosis, cure, mitigation or treatment of a disease or injury. They must be focused on alleviating a physical or mental defect or illness. These expenses can include health insurance premiums, deductibles, co-pays, expenses associated with preexisting conditions, the difference in cost between a semi-private and a private hospital room, lab tests, the cost of non-prescription medicine used to treat injuries or illnesses, and other health-related expenses that aren't covered by insurance. They are typically used in conjunction with a health insurance plan that has a high deductible (i.e., at least $1,000). The annual limit in 2005 is $2,000. You do not need to itemize in order to take advantage of this tax break. Note: Any unused money left in your account at the end of the year will be forfeited. Suggested Reading IRS Publication 502 Medical and Dental Expenses Section 213 of the Internal Revenue Code Copyright © 2005-2018 by Mark Kantrowitz. All rights reserved. www.cancerpoints.com Suggestions and corrections are welcome and should be sent to .