If you enroll in Medical Plan Option C, you can contribute to a Health Savings Account (HSA) to use tax-advantaged dollars to cover your deductible and coinsurance payments. You can also use the money for any eligible medical, prescription drug, dental or vision expense you incur now, or in the future — even if you switch plans, leave the Firm or retire.
With an HSA, you get triple-tax savings. Here’s how:
- Before-tax paycheck and lump-sum contributions to your HSA lower your taxable income. Depending on your tax bracket, you save 25 to 40% on taxes by contributing to an HSA.
- Any gains from interest or investments are tax-free.
- Tax-free distributions mean you don’t pay taxes when you use HSA dollars to pay for eligible medical expenses