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How does a Health Savings Account work ?

You obtain coverage under a qualified health insurance plan with a minimum deductible of $1,200 for singles and $2,400 for families. You are then allowed to deposit up to $3,050 for singles or $6,150 for families into your Health Savings Account for 2010 & 2011. Older Americans can save even more. You do not have to itemize your deductions on your federal income taxes to deduct your contributions to an HSA. You can use the savings account to pay for your lower-dollar medical expenses, or those that are not covered by the health plan. Once you meet the deductible, the health insurance covers your medical expenses as defined in the policy.


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