Health Savings Account

If you enroll in the HealthSaver medical plan, you automatically get a Health Savings Account (HSA). Use this tax-advantaged account to pay for eligible health care expenses now or in retirement. It will carry over year to year, and you can take it with you if you leave ITW.

How the HSA Works

When you enroll in the HealthSaver Plan, ITW contributes money to your HSA: up to $500 for employee-only coverage or up to $1,000 if you cover one or more family members (prorated for enrollment after January 1). 

Note: The annual HSA contribution from ITW is based on your coverage level when you first enter the plan (during Open Enrollment or when you become eligible for benefits). Any mid-year changes in coverage tier (adding or removing dependents) will not result in adjustments to the annual ITW HSA contribution.

You can also contribute to this account, up to IRS limits:

  • Employee-only: $3,150 (plus $500 from ITW) = $3,650 IRS limit
  • One or more family members: $6,300 (plus $1,000 from ITW) = $7,300 IRS limit
  • Age 55 or older: An additional $1,000

You can use the money in your account to pay for eligible health care expenses now or save it for later. At the end of the year, money you don’t spend (including ITW’s contribution) will carry over so you can use it when you really need it — even when you retire! After age 65, you can even use it for non-health care expenses, but you’ll pay taxes.

Need to Use HSA Money Now?

Saving for retirement is a great benefit of the HSA, but what if you need to pay for medical expenses now? Learn the basics about the HSA and how to use it.

Tax Advantages

According to Fidelity, the average 65-year-old couple will spend $275,000 on out-of-pocket health care expenses throughout their retirement. The HSA gives you a way to save for these expenses while taking advantage of tax breaks.

First, your contributions are pre-tax, so any money you contribute lowers your federal taxable income. Then, the HSA money you use to pay for eligible expenses is withdrawn tax-free. The money in your account earns interest, and the investment earnings are tax-free, too.

Once you have $1,000 in your account, you can invest everything over that amount to help grow your savings. You’ll be able to select from a range of options that work best for you. This allows your money to grow and compound on a tax-deferred basis, similar to a 401(k).

How the HSA and 401(k) Can Work Together

When planning for retirement, remember that you can use the HSA and the ITW 401(k) Retirement Plan to save for future expenses. You can use the HSA for health care costs tax-free in retirement, and the 401(k) helps you save for income in retirement.

With the 401(k), you’re going to pay taxes on the money in your account either before you make contributions or after. But with the HSA, you’ll never pay taxes on the money in your account if you use it to pay for qualified expenses.

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