Q. What is an HSA?

A. HSA is terminology used to define a health savings account.

Q. Who can own an HSA account?

A. HSAs are avaiable to anyone covered by a high-deductible health plan.

Q. What type of health plan qualifies for an HSA?

A. For 2008, the minimum deductible for self-only is $1200 and for a family is $2200. The maximum deductible and out-of-pocket for self-only is $5600 and for a family is $11,200.

Q. What is the maximum contribution I can make into an HSA?

A. The maximum 2008 contribution is up to $2,900 for self-only and $5,800 for family.

Q. Can I use my HSA for any other qualified expenses?

A. Tax-free contributions are available for such things as long-term care insurance, COBRA continuation and health insurance while unemployed.

Q. What is the tax treatment for HSA distributions?

A. HSA distributions are tax free for qualified medical expenses. Non-medical distributions will be considered part of gross income and incur a 10% penalty, except for those over 65, deceased or disabled.