Healthcare expenses can be a burden on individuals and families, and with costs continuing to rise, it’s important to take advantage of plans that allow you to be reimbursed. With tax benefits, savings opportunities and a range of other advantages, Health Savings Accounts (HSA) are becoming an increasingly popular choice for those who want to manage their healthcare costs more effectively.
What is a Health Savings Account?
A Health Savings Account (HSA) is a great way to help you control your healthcare costs. It works in conjunction with a qualified High Deductible Health Plan (HDHP) to combine tax-free savings earmarked for qualified medical expenses.
An HSA allows you to set aside money to pay for higher deductibles associated with a lower monthly premium HDHP. The money you save in monthly insurance premiums is reserved for eligible medical expenses you incur in the future. Eligible expenses include things like co-pays and deductibles, prescriptions, vision expenses, dental care, therapy and medical supplies.
It’s also important to note that your HSA balance rolls over year to year and earns interest along the way, and it’s portable meaning you keep it even after leaving employment.
Who Can Contribute?
Not everyone is eligible to contribute to an HSA, even if they are enrolled in an HSA-eligible health plan. You can only contribute to an HSA if:
- You are covered under a high deductible health plan (HDHP).
- You aren’t enrolled in Medicare.
- You weren’t claimed as a dependent on someone else’s tax return from last year.
- You aren’t enrolled in a health plan sponsored by your spouse or parent that is not an HSA-eligible health plan.
An HSA is a great way for you to take control of your healthcare expenses and save money on medical costs. To find out if an HSA is offered by your employer, visit your Employee Benefits Center or reach out to a First Financial Representative. If you are an employer who would like to explore offering HSAs as part of your benefit portfolio, contact First Financial for a free consultation.
