Do you find yourself and your family worrying about how you can save for your high-deductible health insurance? Worried about not having enough money to cover an emergency? Would you like to have a tax deduction on your medical expenses? The Health Savings Account (HSA) is a tax-deductible account opened for the purpose of paying qualified medical expenses incurred by you and your family. Ask yourself these questions to see if a Health Savings Account will benefit you and your family.

Am I Eligible for a HSA?

You are eligible for a regular HSA contribution if, with respect to any month, you:

• Are covered under a high-deductible health plan (HDHP) on the first day of such month;

• Are not also covered by any other plan that is not an HDHP (with certain exceptions for plans providing preventive care and limited types of permitted insurance and permitted coverage);

• Are not enrolled in Medicare; and

• Cannot be claimed as a dependent on another individual’s tax return.

What is a High-Deductible Health Plan?

An HDHP is a plan with an annual deductible no less than the amounts shown below:

Tax Year Self-only Coverage Family Coverage

2007 $1,100 $2,200

For HSA purposes, the HDHP must limit maximum out-of-pocket expenses to no more than the amount shown below:

Tax Year Self-only Coverage Family Coverage

2007 $5,500 $11,000

What are an HSA Owner’s Responsibilities?

If you are eligible, you can establish and HSA in much the same way you would establish and IRA; with a qualified trustee or custodian. Each year, you are responsible for determining your allowable annual HSA contribution and whether you have qualified medical expenses eligible for reimbursement with nontaxable HSA distributions.

Who Can Contribute to My HSA?

If you meet the eligibility requirements for an HSA, you, your employer, your family members, and any other person (including non-individuals) may contribute to your HSA. This is true whether you are self-employed or unemployed.

How Much Can I Contribute to My HSA?

Beginning in 2007, the maximum annual contribution amount is the standard limit of:

Tax Year Self-only Coverage Family Coverage

2007 $2,850 $5,650

How Do I Claim the Federal Tax Deduction for My HSA Contribution?

Contributions to an HSA are fully deductible, the earnings are tax deferred and distributions for qualified medical expenses are tax-free.

You may deduct contributions made by anyone other than your employer as long as they do not exceed the maximum annual contribution amount. Employer contributions are not wages for federal income tax purposes.

To find out if you are eligible to enjoy the benefits of a Health Savings Account, contact your financial consultant or local financial institution.