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 medical expenses.
Here are a few things you should know about HSAs:
- Your employer might offer an HSA plan. However, the money that you put into your HSA is your own. Your employer is not in charge of it. If something happens and you have to leave your job, your HSA follows you.
- Being in total control 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.
- The only qualification that you need to acquire a HSA is to have a high-deductible health insurance policy. There is no small print.
- When used for health expenses, the money you put in your HSA is tax-free. This type of account provide money that is truly yours.
- The main purpose of an HSA is to save money for the future. If you do not 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 want you to be aware of the following disadvantages:
- Even if you seem to be in perfect health, something unpredictable can happen. This makes it hard to know how much money to put into your HSA.
- This type of savings account is not for you if you are not able to continually set aside a piece of your paycheck.
- 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.
- 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 any flexibility.
You do not have to navigate the insurance world alone, contact us to find out more about health savings accounts.