Health Savings Accounts (HSAs) provide an affordable health care solution that employers and employees love. Using an HSA’s unique incentive structure, you can maintain greater control over your health care costs and ensure that you have the coverage you need when serious live events arise.
HSAs offer a variety of benefits and advantages that can’t be seen elsewhere:
Is a Health Savings Account right for you?
First, you have to qualify for a health savings account by purchasing a health insurance policy with a high deductible. As a reminder, a deductible is the amount you have to pay (in addition to your policy’s premium) before your benefits begin. To qualify in 2016, a single individual must have a health plan deductible of at least $1,250; families must have a minimum deductible of $2,500 to qualify.
Once you are eligible, you can begin to take advantage of the financial benefits of the best health savings accounts. Think of a health savings account as a special type of savings account that you intend to use only for medical expenses. The biggest benefit of a health savings account is that the cash you deposit – which your employer may or may not match – is tax-deductible!
The catch is that you can only contribute a certain amount of money into your health savings account each year. In 2016 the maximum contribution limit is $3,350 for single individuals; families can contribute a maximum of $6,750 per year. Health savings accounts also cap your maximum out-of-pocket expenses at $6,550 for single individuals and $13,100 for families.
Top three must-know facts about Health Savings Accounts
To get the most out of a health savings account, you’ll want to understand how these plans work. Here are three important facts about HSAs:
- Health savings account withdrawals are tax-free if used for qualified medical expenses;
- You have more control of your money in a health savings account;
- You can start a health savings account from a different provider other than your health insurance provider.
Combined, these three benefits alone merit speaking with an expert insurance advisor about health savings account plans. We can help you assess your current needs and get you started on an HSA that’s right for you.
If you use the money you deposit in a health savings account for qualified medical expenses, the withdrawals are tax-free.
One of the best advantages of health savings accounts is that you have more control over the money you deposit. At the end of the year, you do not forfeit any of your savings; funds roll over to the next year. In one manner of speaking, health savings accounts are very much like a health care “rainy day fund.”
Also, you do not necessarily have to open a health savings account with your insurance provider. For instance, as long as you qualify, you can turn to your bank to start a health savings account. When combined with a high-deductible health plan, health savings accounts can be a very effective financial vehicle to manage your health care expenses.
Contact us to learn more about how an HSA can provide for your unique health care coverage needs, or get started now with a free quote!
Health Savings Accounts are an invaluable resource for those looking for affordable health care coverage. For more information about HSAs, please see our HSA Frequently Asked Questions guide. To learn more about how Obamacare impacts your HSA, please see our educational resource.
We can help you find an HSA that gives you great coverage at a low price. Contact us today!