Last time, we reviewed what a Health Savings Account is and how it has changed with the new Health Care Act. Now we’ll move on to whether an HSA makes sense for you and your family, including both the benefits and the downsides.
Does an HSA Make Sense for You?
Health Savings Accounts aim to give policyholders more control and accountability for their health care, while concurrently increasing competition for lower health care costs.
For those individuals looking to have more control over their health care spending, a Health Savings Account can help. Coupled with small cash contributions to the HSA, users also have higher deductible insurance plans.
What are the benefits of a Health Savings Account?
HSA policyholders benefit by taking ownership of their health care by focusing more on preventative care. That way, users feel empowered to proactively find treatment that may not be covered by their health insurance policy (such as holistic or experimental medical treatments).
What’s more, HSA policyholders will benefit with monthly savings on lower health insurance premium costs, which will also allow for promotional savings. HSA users can then deposit these promotional savings into their Health Savings Accounts.
HSAs offer appealing tax benefits too. Health Savings Accounts come with triple tax perks, offering policyholders more tax advantages than many retirement accounts. Just like an IRA contribution, an HSA contribution is tax deductible and any qualified medical expense is tax free. Lastly, the funds in a HSA will grow (tax free) for the time the account is open.
A Health Savings Account can be used not only for qualified medical expenses, but deductibles as well. In addition, any unused money in the HSA can roll over into the next year, and will continue to do so year after year.
What are the downsides of a Health Savings Account?
Some users may not like having to do a little more homework in order to benefit properly from having a Health Savings Account. Policyholders may need to do some extra “shopping around” for health care providers in order to save.
In addition, HSA users are required to have health care policies with higher deductibles. While monthly premiums will be lower for these plans, emergencies or large medical bills may mean that patients will be responsible for larger medical bills after treatment.
Have questions about Health Savings Accounts? We can help. Contact get-benefits today to learn more.