Understanding How HSA Works with Cigna Health Savings Account

If you have a health savings account (HSA) with Cigna, it's essential to understand how it works to make the most of this valuable benefit. An HSA is a tax-advantaged savings account that allows you to save money for qualified medical expenses. Here's how an HSA works with Cigna:

1. Eligibility: To open an HSA with Cigna, you must be enrolled in a high-deductible health plan (HDHP).

2. Contributions: You and your employer can contribute to your HSA up to the annual limits set by the IRS.

3. Tax Benefits: Contributions to your HSA are tax-deductible, and the funds grow tax-free.

4. Withdrawals: You can withdraw money from your HSA tax-free for qualified medical expenses.

5. Roll Over: The funds in your HSA roll over from year to year, so you can continue to grow your savings.

A health savings account (HSA) with Cigna provides you with a fantastic opportunity to save for your healthcare costs while enjoying substantial tax advantages. It's important to grasp the specifics of how your HSA functions to fully utilize its potential.

1. Eligibility: To create an HSA with Cigna, you must be enrolled in a high-deductible health plan (HDHP), which means your plan should meet certain deductible thresholds set by the IRS.

2. Contributions: Both you and your employer can contribute to your HSA, allowing you to maximize your savings up to the annual limits established by the IRS. For 2023, those limits are $3,850 for individual coverage and $7,750 for family coverage, with an additional $1,000 catch-up contribution for those over 55.

3. Tax Benefits: The contributions you make to your HSA are generally tax-deductible, reducing your taxable income, while the interest earned on your account balance is tax-free, giving you an additional growth advantage.

4. Withdrawals: You can make tax-free withdrawals anytime for qualified medical expenses, which include not only doctors' visits but also dental and vision care, making it a versatile savings tool.

5. Roll Over: One of the significant benefits of an HSA is that the funds roll over each year. There's no “use it or lose it” rule like with flexible spending accounts (FSAs), allowing you to build your savings and plan for future healthcare costs.