August 8, 2008, Newsletter Issue #140: Setting Up A Health Savings Account

Tip of the Week

Opening a health savings account (HSA) is very similar to opening any other bank account. You can probably open a health savings account at your existing bank or credit union. Health savings accounts are also available through insurance companies and other approved companies as well as through many employers. As with any other banking service, do some homework before deciding where to open your account. There should not be opening fees associated with opening a HSA, but there may be other service fees associated with maintaining the account similar to those with checking accounts and savings accounts. The interest paid on the account will vary from institution to institution, sometimes considerably. Finally, some institutions may offer greater conveniences linked to your HSA such as debit cards that allow you to pay for medical expenses at the point of purchase. That way you will not have the hassle of submitting receipts. If you open your HSA through your employer, your contributions will be made on a pre-tax basis directly through paycheck deductions. If you are opening an HSA on your own, you will need to keep all documentation of contributions made during the calendar year so you can claim them as a direct deduction to your gross income when you prepare your income taxes.

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