Consumer Driven Health Plans (CDHP) with Health Savings Accounts (HSAs) are health plans with a tax-favored savings account created for the purpose of paying medical expenses. An HSA works in conjunction with high deductible health insurance.

Your HSA dollars can be used to help pay the health insurance deductible and any qualified medical expenses, including those not covered by the health insurance, like dental and vision care.

Any funds you withdraw for non-qualified medical expenses will be taxed at your income tax rate, plus 10% tax penalty.

Once you meet your calendar-year deductible, the health insurance pays remaining covered expenses in accordance with the terms and conditions of your particular plan. Some plans pay 100% of covered expenses after the calendar-year deductible is met.


HSAs allow you to deposit money tax-free into an account to be used for eligible medical expenses.

Essentially becoming your healthcare “debit card.”

HSAs can also help you save for retirement. (think 401K for health care)

Here are a few things to know about HSAs:

  • You and / or your employer can put money into your HSA.
  • If you do not use it, you keep it and it rolls over into the next year.
  • HSA contributions are tax-deductible.
  • Withdrawals for health care expenses are tax-free, too. Withdrawals for non-eligible expenses would be taxed and include a penalty.
  • You earn tax-free interest on the money in your account. And in some cases you may have a variety of investment options.
  • Your HSA balance rolls over at the end of the year, so you don’t lose your money, even if you change plans or leave the company.
  • At age 65, you can start using your HSA dollars for any purpose. HSA withdrawals for eligible health care expenses continue to be tax-free. HSA withdrawals for other reasons would be taxed but would not include a penalty.
  • You get the freedom to use both in-network and out-of-network doctors for health care. Assuming it is a PPO.
  • Preventive care, annual physical and age appropriate exams, will continue to be covered at 100%.
  • You can use your HSA for you, your spouse and all dependents you claim on your tax return.

The NARFA Team believes that strategy is one of the keys behind any successful employee benefit program. Each year, we work hard to put together programs for our members that give them flexibility, savings, access, and much more. What never changes is our high level of service and approach of being an advocate for our members.

Please contact us at any time to learn more about our employee benefit programs, and how we have continued to provide strength and stability for our members since 1929.



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