A health savings account (HSA) covers your current and future medical expenses. It’s a smart investment since it provides 12 key benefits.
- You control the account. That means you decide all the details, including how much to contribute (there are limits), the bank that handles the account and how to spend the money. You also retain control over the interest earned.
- Choose to invest some of your HSA savings into a mutual fund. Here, your money has more potential for growth over time.
- It’s available to anyone under 65 years of age. As long as you fit into this age range, you qualify.
- The money rolls over. Money in a flexible spending account (FSA) must be used by the end of the year or you lose it. HSA funds continue to be available until you retire.
- Your HSA account stays put. It’s available to you even if you change jobs, become unemployed, switch insurance carriers, move or get married or divorced.
- Contribution limits are high. In 2017, individuals may contribute $3,400, the family limit is $6,750 and individuals over 55 may contribute an additional $1,000.
- Enjoy a prolonged contribution period. You can make contributions to your HSA from January 1 to April 15 of the following year, which allows you to increase both your HSA and tax savings.
- There is no income requirement to open an HSA. You can make lots of money or have no earned income and still contribute.
- You receive triple tax savings. The money you contribute to your HSA is tax deductible up to the contribution limit, your savings grow tax-free and you don’t pay taxes on the money you withdraw as long as it is used to pay for eligible medical expenses.
- It supplements your high-deductible health plan (HDHP). Use it to pay your deductible or any eligible expense.
- The money pays for a variety of eligible medical expenses. They include the costs of disease and illness diagnosis, cure, treatment and prevention and cover doctor, surgeon and dental fees in addition to the costs of diagnostic devices, equipment and supplies. Check with the IRS for more details on eligible expenses.
- An HSA covers current and future medical expenses. Use it now to offset your high-deductible coverage or let the money grow until you need it for a major medical expense in the future.
A health savings account can be a wise decision for you. Consider these 12 key benefits and talk to your health insurance agent for more details.