Health Savings Accounts —A Smart Approach to Health Insurance

HSA health insurance stands for Health Savings Account, and it’s something you should consider if you have a high deductible plan. In an HSA, you contribute funds to the plan at the beginning of the year all at once, or throughout the year in payroll deductions. The funds you contribute aren’t taxable and can roll over to the next year if you don’t use them all before year’s end. You can use the funds in the plan to pay for medical expenses not covered by your insurance, such as co-pays and prescriptions.

Unlike flexible spending accounts, where your employer owns the account and its associated funds, YOU own your HSA health insurance account. You can use your funds without any federal tax liability at all, whenever you like. This type of account is essentially a way to save for upcoming medical expenses before they occur.

Another good point about HSA plans is that you can use them as you see fit, without the approval of a primary care physician or any other type of administrator. As of right now, you can contribute a maximum of $2,900 per individual per year to an HSA account, and a maximum of $5,800 per family per year. If you leave your health insurance plan that the HSA supports, you won’t be able to make further contributions to your account. However, the funds that are already there will remain available for your use.

You can access your HSA funds in one of several ways. The most popular way is through the use of a debit card that is loaded with your funds by your employer. You can then use the debit card just as you would a credit card; in fact, most debit cards for these accounts carry the MasterCard and Visa logos, so you can use them wherever those kinds of cards are accepted. Other employers may provide you with checks you can write on the account, while other employers may ask that you pay eligible medical expenses up front, and then apply for reimbursement through the account. However you access your funds, an HSA account is a wonderful choice for anyone who wants to be sure the money to pay medical expenses is there when they need it.

This is the third installment in our health insurance series. Be sure to check back for updates…

Filed under: Health Insurance

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