1Potential Tax Advantages: HSA Account holders can receive federal tax-free distributions from their HSA to pay or be reimbursed for qualified medical expenses they incur after they establish an HSA. If they receive distributions for other reasons, the amount withdrawn will be subject to income tax and may be subject to an additional 20% tax unless an exception applies. Any interest or earnings on the assets in the account are federal tax-free. Account holders may be able to claim a tax deduction for contributions they or someone other than their employer makes to their HSA directly (not through payroll deductions). In addition, HSA contributions may reduce state income taxes in certain states. Certain limits may apply to employees who are considered highly compensated key employees. Bank of America recommends you contact qualified tax or legal counsel before establishing an HSA.
Bank of America, Merrill, their affiliates, and advisors do not provide legal, tax, or accounting advice. Clients should consult their legal and/or tax advisors before making any financial decisions.
This material should be regarded as general information on healthcare considerations and is not intended to provide specific healthcare advice. If you have questions regarding your particular situation, please contact your healthcare, legal or tax advisors.
All guarantees and benefits of an insurance policy are backed by the claims-paying ability of the issuing insurance company. They are not obligations of, nor backed by, Merrill or its affiliates, nor do Merrill or its affiliates make any representations or guarantees regarding the claims-paying ability of the issuing insurance company.