Learn about Health Savings Accounts!

There is no question about it; health insurance can be a very hefty expense. This is especially true for families, as children usually need medical assistance and attention more often than adults. However, this doesn’t have to be a huge cost. In today’s economy, we need to be assured that we can receive medical services when we need them, rather than going without and suffering because we cannot afford it.

There is an inexpensive option available that can benefit both individuals and families. Many people are finding that a Health Savings Account is the most economical decision.

What is an HSA?

Basically, it is a personal savings account that allows you to make tax free deposits. This money can be used to pay for eligible future medical, dental, or vision care.  Health Savings Accounts were designed to reduce the growth of health care costs while at the same time, increasing the efficiency of the health care system.

You must have a high-deductible health plan in order to qualify for an HSA. A popular option is Shield Savings. This is a plan offered by Blue Shield that is comparable to an HSA. This plan has higher deductibles but lower premiums, so that it is very affordable. With this plan, you have access to a large number of medical networks.

What are the benefits of an HSA?

There are many advantages to opening an HSA.

• You have the flexibility of choosing where you spend the money. You can pay medical, dental, or vision care expenses, or you can opt to save the money for future uses.
• It offers you peace of mind. You know that the money is there if you need to use it.
• You have control over the account. You decide how much you want to deposit, where the account is held, and how you want to use it.
• These deposits are tax-deductible.
• If the money is not used, it rolls over and you accumulate interest.
• You own the account, so even if you cancel your services, you keep the money that you have deposited.

Who would benefit from an HSA?

An HSA can be advantageous to pretty much anyone. If you make the maximum contributions to your HSA every year you will more than likely have the money right on hand to pay all your hospital bills in the case of a serious emergency. Example: If your out-of-pocket expense on your HSA high deductible health plan is $4000, you simply pay the $4000 of the hospital bills out of your HSA and your insurance company covers the rest of the bills at 100% for the rest of the year.

The best is all the HSA money you use to pay claims is tax advantage!

What can an HSA be used to cover?

An HSA can be used to cover costs that would not normally be covered by a health insurance plan. These coverages include:

• Non-prescription medications, such as cough medicine and aspirin.
• Maternity expenses.
• Long term care expenses.
• Transportation and lodging expenses associated with medical reasons. For example, if you have to travel to another city to obtain medical treatments, you will be covered for hotel stays.
• Chiropractor services, or message therapy.
• Alternative medical services such as acupuncture, homeopathy, or aromatherapy.
• Services of a psychiatrist or psychologist.
• Preventative health services such as vaccines, lab tests, or prescribed vitamins.
• Services for handicapped individuals such as wheelchairs and guide dogs.

HSAs encourage people to stay healthy. If an individual – or family – doesn’t spend money on healthcare services, then this money can be used for savings or investments. Smaller medial expenses can be paid out of pocket and this account doesn’t even have to be touched unless absolutely necessary.