As health insurance costs can often overwhelm individuals and their families, an incredible amount of money can be saved with a simple HSA! An HSA, Health Savings Account, is a specialized account that is used only to pay for medical costs (both future and present costs). Find out details about the many HSA advantages, and evaluate the specific requirements to find out if you can save money with an HSA.
Saving Money with an HSA
While an HSA may only sound like a simple savings account, users of these accounts gain incredible financial benefits! With an HSA, an individual is able to set aside tax-free or tax-reduced funds from their income. As money is deposited, tax-free, into the HSA, the money earns interest. When individuals need to pay for co-pays, prescriptions, or other medical costs, the HSA makes paying for such expenses far more convenient and cost-effective. In fact, some individuals are even able to save around 20-30 percent on their annual health / medical expenses with the advantages of an HSA!
HSA Requirement Checklist
In order to legally utilize an HSA, individuals must meet specific criteria. Some of the regulations include:
- Individuals with a High Deductible Health Plan (HDHP)
- Individuals not covered by an HDHP, another form of health insurance, not enrolled in Medicare, and cannot be claimed as a dependent on anyone’s tax return form
Additionally, if individuals do not meet the above criteria, some still may be able to contribute to an HSA. If an individual is experiencing any of the following issues or circumstances, he or she may be able to contribute to an HSA:
- Coping with a specific physical setback (disease, illness, accident, etc)
- Employee Assistance Programs / disease management program
- Individuals eligible for VA benefits
- Additional circumstances
As additional circumstances can also allow individuals to contribute to an HSA, individuals can meet with their employer, human resource coordinator, or health insurance provider to find out more details about HSA approval.
