Should You Go With An HSA

A Health Savings Account can be a great way to make healthcare more affordable — while putting some money aside for your retirement. They aren’t a good idea for everyone, though.

Here are a few things to consider:

• Do you want save money on healthcare?
  You can deduct the money you spend on healthcare from your Federal income tax. And if your employer contributes to your account, that money is pre-tax — meaning the IRS doesn’t take a cut of that portion of your income. It’s like getting free money from the government to pay your medical bills.

• Do you want lower monthly premiums?
  Because HSAs go hand-in-hand with high deductible health plans, your monthly premiums are lower. And as your Health Savings Account builds, you can afford to raise your deductible. That means your monthly premiums get even lower.

• Do you want more medical options?
  You can use HSA funds to pay for almost every medical expense: regular trips to the doctor; dental care; eye exams; chiropractic services; and acupuncture. You can also use those funds to pay for things that almost no insurance plan will cover, such as cold medicine and bandages.

• Do you want to save for your retirement?
  The money you put into your HSA can “roll over” each year — you aren’t required to spend a certain amount. It can keep adding up, and keep drawing interest. Once you hit age 65, you can withdraw the money for any reason and not pay any penalty on it.

• What’s your health like?
  Are you generally in good health? How much do you spend a year on care? If your yearly medical bills are average — say, a few hundred dollars a year — you can cover them with the money from your HSA and come out ahead at tax-time. If you have a serious pre-existing condition, the bills can add up fast — and drain your account. You may want to look at different health options, like HMO plans.

Finding Your HSA Plan

Remember, the HSA is only half of the coverage solution. First, you need to enroll in a high deductible health plan. Once you’re in the plan, you can open a Health Savings Account — which is usually administered through a bank.

Choose a plan, apply for coverage, enroll, then open an account. Not sure where to start? Talk to an insurance agent. We can match you with agents in your area ready to help. Fill out our short form and get free quotes now. You’ll be comparing plans in no time.