Health Savings Accounts (HSAs) can be a valuable tool for individuals seeking to manage their healthcare expenses wisely. Piscataqua Savings Bank is here to shed light on some frequently asked questions surrounding HSAs*, helping you navigate this financial avenue with confidence.

What is a Health Savings Account (HSA)?

A Health Savings Account (HSA) is a tax-advantaged savings account that individuals can use to pay for qualified medical expenses. HSAs are designed for individuals and families who are covered by high-deductible health care insurance plans as defined by the Internal Revenue Service (IRS). HSAs provide similar features to a checking account with competitive interest rates, check writing capabilities for IRS-qualified medical expenses, and a debit card that provides access to your HSA funds for IRS-qualified medical expenses at point of sale (POS) with signature or PIN. HSAs provide account holders with a triple tax advantage: tax-deductible contributions, tax-free earnings, and tax-free withdrawals for qualified medical expenses.

Who might benefit from a Health Savings Account?

Individuals with high-deductible health plans: HSAs are specifically tailored for individuals enrolled in high-deductible health plans. If you’re comfortable choosing a higher deductible health insurance plan in exchange for lower monthly premiums, an HSA can be a strategic addition to your financial toolkit.

Tax-savvy individuals: HSAs offer a unique tax advantage. Contributions are tax-deductible, reducing your taxable income. The interest and investment earnings in the account are tax-free, and qualified withdrawals for medical expenses are also tax-free. This triple tax benefit makes HSAs an attractive option for those looking to optimize their tax strategy.

Long-term planners: HSAs aren’t “use it or lose it” accounts. The funds roll over from year to year, allowing you to accumulate savings for future medical expenses or even retirement healthcare costs. This feature makes HSAs a powerful tool for individuals with a long-term financial perspective.

What sort of health-related expenses can be covered by a Health Savings Account?

  1. Doctor Visits and Consultations: Whether it’s a routine check-up or a specialist consultation, HSA funds can be used to cover various medical appointments.
  2. Prescription Medications: The cost of prescription medications can be a significant part of healthcare expenses. HSAs allow you to use funds to pay for prescribed medications.
  3. Dental and Vision Care: From routine cleanings to eyeglasses, expenses related to dental and vision care are considered qualified medical expenses under HSA guidelines.
  4. Hospital Services: Inpatient and outpatient hospital care, surgeries, and other medical procedures can be paid for using HSA funds.
  5. Mental Health Services: As awareness of mental health importance grows, HSAs provide a financial avenue to cover qualified mental health services, including therapy and counseling.
  6. Medical Equipment and Supplies: HSAs can be used to purchase or rent medical equipment and supplies prescribed by a healthcare professional.
  7. Preventive Care: Many preventive services, such as vaccinations and screenings, are eligible for HSA coverage.

Opening a Health Savings Account with Piscataqua Savings Bank

An HSA is not just a savings account; it’s a strategic financial tool that allows you to put aside money for both short and long-term healthcare expenses while taking advantage of a tax-deduction. Opening a Health Savings Account with Piscataqua Savings Bank is easy and only requires a one-time set up fee of $15. Give us a call at 603-436-5250 with any questions or visit us in person at 15 Pleasant Street Portsmouth, NH to open your account today.


*The information provided here is a general guide. It’s always advisable to consult with financial and tax professionals to tailor your HSA strategy to your specific needs. 

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