What is a HAS?
HAS stands for health savings account. This is a type of savings that allows you to deposit cash in for any health related expenses that may come up. The good thing about it is the money you put into that account is tax free.
There are certain criteria for a health savings account. To be able to have one you must:
- Your plan has a high deductible.
- Not have any other health insurance (this includes Medicare). You can have other types of health insurance like disability, dental and vision, long term and so on.
- Not be able to be claimed as a dependent on anyone else's tax return.
Your employer as well as yourself can put money into your HAS. The total limit however cannot be greater than the yearly amount allowable set by the government.
In 2010, the annual limit set by the government for just you was $3050. For a family the limit was $6150.
Additionally, any deposit made to your HAS must be cash. You cannot put into the account stock or property. Further you are unable to make deposits into your HAS when it's time for you to claim medicare. You can however keep the money that you have deposited into the HAS to that point in the account.
According to the IRS, the benefits of a HAS are:
- You get to claim tax deduction contributions made by you, but not your employer contributed.
- The cash your employer contributed to your HAS you don't have to claim as part of your gross income.
- Interest made from your HAS is tax free.
- If you withdraw money from your HAS for medical expenses and they are qualified, it's tax free.
The way to sign up for an HAS is to have www.getinsurancefast.com to help you find an insurance company, a bank, a credit union or any other type financial institution. They also oversee the HAS's for you if needed. Also your employer may have a program to set it up for you.
HAS are great ways to set aside money for medical expenses and save on your income tax.