Definition:  A financial device that augments one’s health care insurance policy.  It doubles as a tax-free savings plan and it allows participants to become money-conscious health care shoppers.  The following are some of the rules and traits of this “health care savings plan”.

• It can be established by an employer or an individual; however, only in conjunction with a qualified high-deductible health care plan.
• It can be funded (pre-tax) by employee pay-roll deductions, employer contributions or by an individual.
• The maximum contribution, per year; $3,450 for an individual and $6,900 for a family.  These dollars can be claimed as a tax deduction.  If age 55 years or older, another tax deductible $1,000 can be included.

These savings dollars can be rolled-over.  No need to spend prior to year’s end and one’ account continues to grow:  Save!

Before age 65-years, withdrawals for non-related health expenses are subject to a 20% penalty, along with income tax.