Massachusetts Health Savings Accounts
A health savings account (HSA) in Massachusetts allows people to set aside money for medical expenses while reducing their taxable income. People must be enrolled in a high-deductible health insurance plan to qualify for an HSA. Once they open an account, they can fund it with pre-tax dollars.
Account holders can use the money inside their Massachusetts health savings account to pay for qualified medical expenses, including the deductible. HSAs can also cover expenses that aren’t covered by the holder’s healthcare plan, such as dental and vision expenses.
It’s important to make sure the HSA covers the expense before withdrawing the money. If the HSA is used to pay for a non-qualified expense, the money will be taxed, and a 10 percent penalty will be assessed.
HealthQuoteInfo.com has a network of health insurance providers that offer plans that are compatible with HSAs. Compare plans, make a selection, and set up your MA health savings account.
Advantages of an HSA
- Reduce your taxable income by deducting 100 percent of your HSA contributions
- Accrue interest and gains on your HSA contributions without paying taxes
- Avoid taxes on the income by using the account to pay for qualified medical expenses
- Pay a lower premium with a high deductible insurance plan
- Pay for medical expenses from a previous year
- Pay for COBRA or Medicare premiums
- Invest HSA contributions in mutual funds
- Spend less on medical expenses
Annual Contribution Levels for HSAs
The annual contribution levels for HSAs change yearly. The levels usually increase by a small amount each year.
For 2019, the maximum MA health savings account contribution is $3,500 for self-only coverage and $7,00 for family coverage.
Individuals who are 55 years or older can also make catch-up contributions. These contributions are $1,000 a year and have remained unchanged since 2009.
Out-of-pocket Spending on HSA Compatible High Deductible Health Insurance Plans (HDHP)
For 2019, out-of-pocket spending is limited to $6,750 for self-coverage and $13,500 for family coverage. This does not include premiums, but it does include various expenses such as co-payments and deductibles.
Minimum Deductible Amounts for HSA-Compatible HDHPs
For 2019, the minimum deductible for HDHPs is $2,700 for family coverage and $1,350 for self-coverage. That is the same as it was in 2018.
Tax Relief for Massachusetts Citizens
Residents of Massachusetts
can deduct health savings account contributions when filing their taxes. This is a rare opportunity to deduct healthcare costs on taxes. While taxpayers without HSAs have the option to deduct healthcare expenses, few meet the threshold necessary to itemize healthcare deductions.