Oregon Health Savings Accounts

Contributor

By Brad Beauchamp
eHow Contributing Writer

Article Rating: (0 Ratings)

The Oregon Health Savings Account, or Medical Savings Account, is a supplemental option to a health insurance policy. Unlike a traditional savings account, a Health Savings Account offers tax-advantaged deposits, meaning that the monies that enter the account are tax-deductible, accrue tax free, and are distributed tax-free. Individuals with an Oregon HSA can use their funds to cover any and all medical expenses. Heath Savings Accounts frequently offer higher interest rates than savings accounts. Although insurance companies cover major accidents, the HSA can be used for the smaller ticket items, such as deductibles and medications.

If I have an Oregon HSA, Do I Need Medical Insurance?

Photo by Big Grey Mare
Yes. In Oregon, all HSAs must be coupled with a medical insurance plan. This is to ensure that any serious illnesses or accidents are covered regardless of when the HSA was started.

Who Is Eligible for an Oregon HSA?

Photo by Old Shoe Woman
Individuals younger than 65 may set up an Oregon HSA so long as they also have a qualified health plan with a "high deductible rate." Check with your CPA or financial adviser to see what rates constitute a high deductible, as it changes each year.

Oregon HSA Benefits

Photo by highstrungloner
The individual can decide exactly how her funds are spent. Common "out-of-pocket expenses," such as deductibles and doctor visits, can come directly out of the HSA. And with an HSA, no procedure or medicine is contingent on the medical insurance provider's approval. In addition to that, there are tax incentives for having an Oregon HSA. Finally, individuals can choose to build their HSAs when it's convenient. If the budget constricts for three months and there isn't enough income to cover a contribution, there's no risk of losing your HSA due to nonpayment.

Contribution Limits

Photo by dmason
Just like an IRA, an individual can only deposit so much money into an Oregon Health Savings Account every year. Typically, contribution limits increase by approximately $100 to $200 per year. It's best to check with your CPA or financial adviser to see what the current contribution limit is. Note that individuals 55 and older may include an additional "catch-up" sum of money, typically about $1,000.

How to Withdraw

Many companies that offer HSAs distribute a card, similar to a debit or credit card, that can be used for any medical expenses. Essentially, the card directly accesses the funds held in your HSA, and that triggers a tax-free distribution. Keep the receipt of the transaction; the Oregon HSA provider may need it on file. If HSA funds are used for a non-medical purchase, they're subject to the income tax plus a 10 percent penalty, just like an early distribution with an IRA account.