HSA funds can pay for expenses before you meet your deductible as well as help pay for services not covered by your health plan, COBRA coverage during periods of unemployment, medical expenses after retirement and long-term care expenses.

These health plans combine a qualified high-deductible health insurance policy with a savings account.

The qualified high-deductible policy protects the insured from the cost of a catastrophic illness,
prolonged hospitalization or a particularly unhealthy year. The savings account is controlled by the insured and is intended to pay routine health expenses. Deposits to federally qualified HSAs are tax free. Those who withdraw HSA money for purposes other than health care expenses will be subject to an additional 10% tax penalty except when an individual is 65 and older or is disabled.

Johnston & Matthews health savings accounts (HSAs) are tax-advantaged, employee-owned accounts that are linked to high deductible health plans. Their portability, yearly roll-overs of unused funds and investment options make them a powerful, long-term tool for promoting healthcare consumerism.