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The Fantastic Benefits Of Health Savings Accounts

The Fantastic Benefits Of Health Savings AccountsEven Americans with health insurance worry about medical expenses. The reason is high deductibles and other out-of-pocket costs. Here are facts about expenses paid by the insured.

A Way to Pay – HSAs

Health Savings Accounts (HSAs) were designed to help people with high deductible health plans pay for their uncovered medical expenses. At this point, you probably wonder what constitutes a “high deductible health plan.” For 2015, the deductible needs to be at least $1,300 for an individual policy or $2,600 for family coverage for it to meet the definition of a high deductible health plan.

Many banks and brokerages offer HSAs to their customers, and employers often make contributions if you use their chosen administrator. According to the IRS, the 2015 contribution limits for people under 55 are $3,350 for an individual and $6,650 for a family.

HSA Benefits for You

There are several good reasons for you to start on HSA.

  1. Tax Advantages – There are three tax benefits of HSAs. First, you can deduct all of your contributions from your taxes. Second, any money you get from an employer is tax free. Third, the growth is tax free. This is the best of both worlds, if you have access to an HAS, you should definitely take advantage!
  1. Use it for a Wide Range of Medical Expenses – You can use it to pay for medical expenses you incur before you meet your deductible. HSA funds can also help pay medical expenses that include prescription drugs, insulin, and dental procedures.
  1. Flexibility / Portability – When you set aside money in an HSA, you do not need to use it all within a calendar year. The amount rolls over and grows from year to year. This means you can use HSA money for retirement expenses. HSAs have some portability benefits. If you leave your job and become self-employed, you can take the HSA with you. Your spouse can inherit your HSA. You can even change administrators.
  1. Your Account Will Grow – With an HSA account, you can invest in a wide array of investments. You’re only limited by what your administrator offers. HAS Bank, for example, lets you invest in Vanguard funds.

Ask about HSAs

HSAs are only for qualified medical expenses. There are tax penalties if you use the funds for non-medical purposes. Make sure you comply with your plan’s record keeping requirements. Also, the plan needs to clearly communicate what does and does not count as a “qualified medical expense.”

Not only can you or your employer make contributions, parent can contribute too. This way the can help you start a nest egg for healthcare expenses. HSAs are a great tool to help with medical expenses. Look in to HSAs and take action if it is right for you.



  1. So far using a HSA and high deductible plan has saved us at least $2,000 this year. I expect that pace will slow but unless something big happens, it’s definitely projected to work out in our favor, which equates to more money in our pocket.

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