Friday, April 11, 2014
The recent implementation of the Affordable Care Act has left many people questioning their own health care plans. A popular arrangement is to pair a high-deductible health plan with a Health Savings Account (HSA). An HSA is a tax-exempt account funded with pretax dollars. Similar to a 401(k) plan, employers and/or employees may make contributions. Not only do HSAs save on health care, but they also provide many estate-planning benefits:
- Unused HSA balances can supplement your retirement income or continue growing on a tax-deferred basis.
Contributions made to your HSA can reduce your income tax liability.
- HSAs allow you to withdraw funds tax-free to pay for qualified medical expenses.
See E. Hans Lundsten, Joseph Marion, III, David Riedel, and Christina Scola, ABCs of HSAs: Learn How an HSA Can Benefit Your Estate Plan, JD Supra Business Advisor, Apr. 7, 2014.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.