Health Savings Accounts
Health Savings Accounts, or HSA, is a savings account that works alongside a high-deductible health insurance policy, allowing you to put aside tax-free money to pay for any medical expenses. They are a relatively new invention. Here are a few things you should know about HSAs:
- Your money – Your employer might offer an HSA plan. However, the money that you put into your HSA your own. Your employer is not in charge of it. If something happens and you have to leave your job, your HSA follows you.
- No fluctuations – Being in total control also means that you control how much money is in your HSA. You are the only one who can put money into the account and take it out. You don’t have to worry about fluctuations or changes in price.
- Only one qualification – The only qualification that you need to acquire a HSA is to have a high-deductible health insurance policy. There is no small print. Almost anyone can have this type of account.
- Tax-free money– When used for health expenses, the money you put in your HSA is tax-free. This type of account provides a cache of money that is truly yours.
- Save money –The main purpose of an HSA is to save money for the future. If you don’t have the money to get a lower-deductible insurance plan, or if you just want to save money for a house or retirement, a HSA is a great option.
However, as with any other policy, there are disadvantages to HSAs. We here at SOGO want you to be fully aware of these disadvantages. You need to take all of the following points into account when you are thinking about acquiring an HSA.
- Unpredictability – Even if you seem to be in perfect health, something unpredictable can happen. You might contract a long term illness or get into a workplace accident. This makes it hard to know how much money to put into your HSA.
- Setting aside money – This type of savings account isn’t for your if you aren’t disciplined enough to continually set aside a piece of your pay check. No one is going to put money into your HSA for you. You have to put aside enough money to help cover any medical expenses that you or your family may have in the future.
- Taxable – You can take money out of your HSA for non-medical reasons. However, that money may be taxable. The money in this account is only considered tax-free if used for medical expenses.
- Only one health insurance – If you have an HSA, you are only able to have one health insurance policy, and that policy must have a high deductible. HSAs do not allow you any flexibility on this issue.
Contact SOGO if you want to know more about HSAs. You don’t have to navigate the insurance world alone.