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Health Savings Accounts (HSA)

5.0% interest rate effective through December 31, 2008 (adjustable every January 1 and July 1)

A Tax Advantage to Offset Health Care Expenses

In an effort to combat rising medical costs Congress created HSA’s to provide consumers an incentive to pay “first-dollar” medical expenses. HSA’s are IRA-like accounts designed exclusively for covering medical expenses.

To be eligible an individual must be covered by a high deductible health plan (HDHP) and not enrolled for benefits under Medicare (generally not yet age 65). Contact your health plan administrator to see if your health plan qualifies as a HDHP.

Tax Benefits

• Contributions are excluded from income
• Earnings are tax deferred
• If used for qualified medical expenses assets are never taxed
• Unused assets may be used for retirement at or after age 65. If not used for medical expenses will be subject to income tax.
• Subject to 10% penalty if withdrawn before age 65 for non-medical expense purposes and subject to income tax.
• Upon death, assets are part of estate or transferred to named beneficiary.

As with all National Covenant Properties investment accounts there are no fees charged by NCP.

See Also: Certificates, IRAs and Loans