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Avco Insurance Services, Inc.

835 N Niagara St
Burbank, CA, 99150



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Insurance Brokers:

Joseph Castano

Health Savings Account

Health Savings Account (HSA's) or HSA plans were first introduced in 2018 as a means to address the issue of rising healthcare costs. These plans allow you to save money to pay for routine healthcare expenses such as doctor visits and prescription drugs on an income tax-free basis. Any individual, who has an approved High Deductible Health Plan (HDHP) and who is not covered under another disqualifying health plan, can participate in an HSA.

What is an HSA?

Health Savings Accounts are really a combination of a health insurance policy meeting minimum US Treasury policy design requirements called a High Deductible Health Plan (HDHP)o and a separate custodial savings account for future medical expenses called a Health Savings Account (HSA). Congress created the HSA as a way to cover your future medical expenses, and it is subject to IRS regulations and guidelines. A health insurance company or an insurance plan usually provides the qualified health insurance policy. A licensed HSA administrator and financial services company, such as a bank, usually acts as the custodian and administers the savings account portion of the HSA.

A qualified HSA plan has a single deductible that applies to all medical expenses covered by the insurance policy whether you are insuring yourself or the entire family. This deductible must be satisfied each year before the company pays on any medical claims. The single deductible for an individual must be a minimum $1,150 and can be any deductible up to a maximum out-of-pocket limit of $5,600 (if the plan pays at the 100% level after the deductible) and the single deductible for a family must be at least $2,300 up to a maximum out-of-pocket limit of $11,600 ( if the plan pays at the 100% level after the deductible) for the 2018 calendar year. Preventive care can be provided without having to meet the deductible first. The limits on maximum out-of-pocket expenses include both the deductible and any shared expenses you are obligated for. These limits are subject to annual cost-of-living adjustments determined by the IRS, which may cause these values to change over time. You can exceed the out-of-pocket limits if you go outside the provider network on a preferred provider plan, the plan still qualifies.

Benefits for Employers:

  • An employer can also offer Health Savings Accounts to his employees and both the employer and employees are allowed to contribute funds to the HSA.
  • If offered in conjunction with a qualified Flexible Spending Account (FSA) commonly referred to as a cafeteria plan, savings in FICA and FUTA taxes as well as income taxes can be achieved.

Benefits for Consumers:

  • Contributions to a HSA are tax deductible.
  • Investment income is tax-free.
  • Qualified withdrawals are tax-free.

You can save up to the maximum contribution limit of $3,000 for an individual HSA and $5,950 for a family HSA regardless of the HDHP deductible for 2018. These limits are also subject to annual cost-of-living adjustments. Amounts are no longer pro-rated if you start the plan mid-year. You can now make the full year's contribution even if you start as late as December. Individuals age 55 to age 65 can contribute an additional $1,000 over the above limits in 2018.

Consult your tax advisor for additional information concerning HAS plan deductibility.


Health Savings Accounts (HSA’s) 2018 Individual Family
HSA Individual High Deductible Health Plan Requirements
Minimum Deductible $1,150 $2,200
Maximum Contribution $3,000 $5,900
Age 55 to 65 Catch – Up Contribution $1,000 Each 55-65
Maximum Out of Pocket Expenses $5,800 $11,600


US Treasury Department on HSA:

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