health care savings account is a form of medical and retirement savings account that is eligible for favorable tax treatment. The newest form of health care savings account was created by the Medicare Modernization legislation passed in 2003. If you are covered by a high deductible health plan, you are eligible for a health care savings account. This means that you have to combine your health care savings account with a high deductible health insurance. A high deductible health insurance is less expensive than traditional health insurance, since it only covers expensive medical treatment. The high deductible health insurance has to meet the IRS requirements and the deductible has to be at least $1,000 for individuals and $2,000 for families. The annual out-of-pocket expenses must not be more than $5,000 for an individual or $10,000 for a family. You can purchase a high deductible health insurance on your own or obtain one through your employer. If you purchase a high deductible health insurance in order to combine it with a health care savings account, you should always ask the issuer if the policy is qualified and can be combined with a health care savings account.

You can open a health insurance savings account on your own by contacting a health savings account provider directly. It is also common for employees to obtain a health insurance savings account through their employer, and let the employer negotiate the deal the with the health savings account provider on behalf of the employees. If you are interested in a health insurance savings account you should always contact your employer first in order to find out if the company is offering health insurance savings account for their employees. In some cases a health insurance savings account that is obtained through your employer will decrease the premiums that you will have to pay considerably and some companies will even fund part of the health insurance savings account for you, or match the health insurance savings account in the same way as they match 401(k) plans.

It is advisable to compare health savings account information form several health savings account providers before you decide if you should obtain a health savings account through the health savings account provider that have an arrangement with your employer or if your should go for an individual health savings account. If you choose the health savings account provider that has an arrangement with your employer, you may be eligible for pretax contributions. This is however not a general rule, so it is important that you read through the health savings account information or ask the health savings account provider regarding this. If you contact a health savings account provider on your own as set up an individual health savings account, you can deduct your contributions when you file your taxes, regardless of whether you itemize or not.