In order to use a health savings account (HSA), you must be part of a High Deductible Health Plan (HDHP). Though the deductible is high, your premiums are low and you are still covered for catastrophic medical events. The renewal costs are also much cheaper than an HMO, PPO, or other types of health plans.
Dental care, eye glasses, and eye surgery are typically not covered with many HMOs or PPOs. HSAs can be used for these types of expenses, in addition to acupuncture, psychiatric treatment, fertility treatment, and other alternative medicines.
With an HSA, there is no network. Account holders are not forced to choose from a list of doctors or hospitals. HSA account holders play an active role in every healthcare decision.
The money that you deposit into your HSA is tax-deferred. Even if you spend the entire account savings on approved medical expenses, the money is still deductible.
As mentioned above, unlike a Flex Spending Account, the money in your HSA can grow for years until you need it; regardless of employer. You can pay for medical expenses out of pocket, save the receipts, and then reimburse yourself for those qualified medical expenses any time in the future with HSA funds.
You can pay for your health care from your retirement account once in your lifetime. If you’re short on cash, you can take a bit from your retirement and transfer to your HSA without a penalty.
Your HSA money can join with your self-directed retirement funds and invest in alternative investment options like real estate, gold, private stock, or a loan.
If you happen to make a lucrative investment and earn thousands, the money will stay in your HSA until you need it, tax-deferred.
If you have trouble securing a profitable investment, or if you are between investments, the money in your HSA still earns tax-deferred interest.
Healthcare costs must be 7.5% of your income to be tax-deductible. Most Americans do not qualify for this, even during a year when they spend a lot of money on health care costs.
Whether you're an employee, an employer, or you're self-employed, education about Health Savings Account is an important step in discovering the best health care option for you or your employees. Call New Direction Trust Company at 877-742-1270 or send us an e-mail at firstname.lastname@example.org to learn more.