What is an HSA?
A Health Savings Account, also known as an HSA, is a tax-advantaged, individually-owned account that is used to pay for qualified medical expenses now and in the future (includes dental and vision).
Things to Know About HSAs
- Pre-tax contributions*: If you are an HSA eligible individual, you — and your employer — can make tax-free contributions (up to the annual limit) to your HSA.
- Tax-free growth: Any investment or interest earnings are tax-free.
- Tax-free withdrawals: Withdrawals are tax-free when funds are used for qualified medical expenses.
- Portability: Your account stays with you, even if you change jobs or health plans.
- No "Use It or Lose It": Funds rollover year-to-year, no matter the balance.
* Health Savings Accounts (HSA) have tax and legal ramifications. Blue Cross and Blue Shield of New Mexico does not provide legal or tax advice, and nothing herein should be construed as legal or tax advice. These materials, and any tax-related statements in them, are not intended or written to be used, and cannot be used or relied on, for the purpose of avoiding tax penalties. Tax-related statements, if any, may have been written in connection with the promotion or marketing of the transaction(s) or matter(s) addressed by these materials. You should seek advice based on your particular circumstances from an independent tax advisor regarding the tax consequences of specific health insurance plans or products.