Health savings accounts (HSAs) can help individuals save money by paying for a number of health care expenses that are not covered under their current health insurance policy. These plans may also help in providing funds for individuals with a limited amount of health insurance coverage, especially on services that may be related to uncovered preexisting conditions.
As HSAs are set up in conjunction with high-deductible health insurance policies, someone considering purchasing one should first determine if the plan’s deductible will be manageable should a medical need arise.
However, in many cases – primarily for those who are young and in good health – a high deductible health insurance policy does make sense; typically the higher the deductible, the lower the premium will be for the policy.
In addition to building up a health-related savings fund, owners of an HSA may even obtain tax advantages, as they may be able to deduct the deposits that go into their HSA account when preparing their annual tax returns.
When withdrawn for qualifying health-care related costs, the money in an HSA often can come out tax-free. In addition, funds within the HSA account will typically grow on a tax-deferred basis, allowing the money to compound faster.
If this sounds like something that could be of benefit, before you open an account you should discuss your options with your advisor. Be sure to compare different plans and deductibles for the combination that will work best for you.
If you need help give us a call 816-254-6100