How a Health Savings Account Can Help You Manage Your Finances

How a Health Savings Account Can Help You Manage Your Finances

Did you know: A Health Savings Account (HSA) is like a retirement fund for your health care expenses? About 21 million people in the United States are already using one to help manage their finances, mostly by having it deposited from their paycheck before taxes. But there are other ways to deposit money into your HSA, such as depositing post-tax money and deducting your contributions from your income tax. This way, when you have a medical expense, you can use the money in your HSA to cover part of these expenses. A HSA is your own savings account for unexpected medical costs that eliminates stress and worry knowing you have planned ahead for life’s unexpected moments.

One long-time Traverse City agent, Geoff Harris of Harris Agency LLC, weighed in on the benefits of using a Health Savings Account: “There is a definite advantage of having a plan that allows claims or out-of-pocket expenses to be paid with pre tax dollars, because that’s essentially what HSA plans provide. That is the benefit of having HSA-qualified insurance; you’re virtually buying your insurance services on sale.”

Harris also explained the benefit of having a HSA as you approach Medicare age (65-plus), saying: “The more you put into your HSA, the more money you have that’s tax free. Many people are paying for premiums with after-tax money, when they could be paying with pre-tax. This could save them anywhere from $500 to $600 a year or more.” Harris says he’s “encouraging a lot of his clients to maximize their annual HSA contributions, as that money can be used when they retire, for Medicare premiums plus claims.”

So, what are some other advantages of a HSA? There are many, even beyond helping you build savings for your future, such as:

  • Tax benefits: HSAs give you the ability to put post-tax money into your HSA, then deduct the contributions from your income taxes
  • Control: You control how to spend the money in your HSA
  • Flexibility: You can pay for things that your medical plan may not cover, or the usual medical expenses
  • Convenience: Payment for qualified medical expenses can be made by your HSA debit card
  • Portability: If you move to another state, or get health care coverage through an employer or another provider, the funds in your account remain available to you

To learn more commonly asked questions about Health Savings Accounts and how to start your own today, visit our website. To speak to a Health Plan Advisor about plan options, call 888-899-4931.

 

Photo credit: jridgewayphotography

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