Not only is the money in your HSA pre-tax money, it has also grown tax-deferred. It has money you have never paid taxes on. And you can use your HSA to pay long-term care insurance premiums (but not for long-term care itself!).
A large percentage of those turning 65 today will enter a nursing home at some point during their life, and many of us will require some form of help with our daily living as we get older. Some of us will spend five years or more living in a nursing home. Since Medicare does not pay for nursing home or long-term care expenses, long-term care insurance is a smart investment.
You must have a qualifed Long Term Care Insurance Contract in order to use your HSA to pay for the premiums. Page 11 of the IRS Publication 502 describes the criteria in detail. Click here to read the section regarding Long Term Care Contracts.
Remember, you have to be covered under a Qualified High Deductible Health Plan in order to open a Health Savings Account.
The 2010 Health Savings Account contribution maximums are as follows:
Individual Coverage - $3,050
Family Coverage - $6,150
If you are over 55 years old you can contribution another $1,000 in 2010.
Please feel free to call our office at 615-790-0990 with additional questions. You can also email us at jforton@fullserviceins.com or blambert@fullserviceins.com.