People tend to avoid HSAs because they aren’t familiar with how they work. They’re well worth considering because they save money.
Health savings accounts, otherwise referred to as HSAs, are very well advertised, but for some reason people tend to avoid them. There isn’t a really clear reason for that because on closer examination HSAs have the distinct advantage of saving you money, and who doesn’t want to do that these days?
The one thing you need to remember is that the HSA may only be used in combination with a high deductible health plan (HDHP). The two health care companions function as a tag team, to distribute health insurance and operate as a payment plan. When used together, you get some nice price breaks and the actual benefits extend beyond what your typical Florida health insurance plan may offer.
Setting up an HSA is actually really easy. All you have to do is go to the bank or another financial institution. Remember, you also need to get signed up for an HSA qualified HDHP that will have a minimum deductible of anywhere from $1,200 to $2,400, depending on whether it’s individual insurance or a family plan. So, along those same lines, if the plan is just for you, you may put in the maximum of $3,050 or $6,150 for a family. For those over the age of 55, they may toss in an extra $1,000 every year as a catch-up contribution.
You know what the best thing is about an HSA? You’ll love this if you happen to be younger and in fairly good health, or, older and in good health. If you have a good year and don’t have that many medical expenses, you get to keep what’s in the account for future use. Not a bad deal hey? In fact, you can keep adding money every year, so long as you don’t go over the contribution limit. Note: the yearly contributions have a set limit, but the total savings in the account can be as much as you let it grow. That’s pretty appealing; along with the fact you get to control how you spend the money.
Did you know that HSA money is tax deductible? And, not only that, but it grows “tax free” for as long as you use it to pay for “medical expenses.” That brings up a question I hear quite a lot and that involves what people can use their HSA account money for in the first place. The answer to that is you may use it for alternative treatments (acupuncture), some over the counter medicines and even most dental procedures. Hint: not all insurance companies count these payments as part of your deductible, so you might want to check that out first.
The good news is that the list of HSA qualified expenses is nice and long, which is a great benefit to you, because it means you don’t need to separate coverage for things like prescription drugs, dental or vision care. This saves you money as well. The bottom line is an HSA is worth trying.