Health Savings Accounts (HSAs) have been around for 10 years now! To qualify to open an HSA you must have a Qualified High Deductible Health Plan.
Why might an HSA be the right choice for you?
- It saves you money. For individuals with few regular health expenses, paying a traditional health plan premium can feel like throwing money out the window. HDHPs come with much lower premiums than traditional health plans, meaning less money is spent on premiums. Plus, HSAs are basically “cash” accounts, so you may be able to negotiate pricing on many medical services.
- It’s portable. Even if you change jobs or switch insurance companies, you get to keep your HSA.
- It’s a tax saver. Contributions to your HSA are made with pre-tax dollars. Since your taxable income is decreased by your contributions, you pay less in taxes.
- It allows for an improved retirement account. Funds roll over at the end of each year and accumulate tax-free, as does the interest on the account. Also, once you reach the age of 55, you are allowed to make additional “catch-up” contributions to your HSA until age 65.
- It puts money in your pocket! You never lose unused HSA funds. They always roll over to the next year.
* Please note: State laws differ. Contributions made to your HSA may not be deductible from state income taxes.