For most people, Health Savings Accounts and HSA Plans just make sense. Instead of paying high premiums for a “rich” health plan that you rarely use, why not opt for a high deductible health plan instead (that is much less expensive) and use some of the savings to fund a health savings account. This is an account that you own, by the way, and the money that is contributed is tax deductible too! No more padding the insurance company’s bank account — pad yours instead!
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What is an HSA?
A Health Savings Account (HSA) is a tax advantaged savings account that allows you to set aside money for health care. This savings account is paired with a high deductible health insurance plan — the result being affordable yet comprehensive health coverage. Different from other benefit products, dollars invested in an HSA roll over from year to year (there is no “use it or lose it” rule), interest is paid, money can be invested in mutual funds, and it is owned by you, not your employer. HSA health plans are available on an individual or group basis.
Benefits of HSAs include:
- Affordable Health Insurance Premiums – You pay less each month for high deductible health insurance premiums.
- Tax Advantages – Contributions to HSAs are tax deductible, interest and/or investment gains in HSA accounts are tax exempt, and withdrawals for qualified health care expenses are tax free.
- More Control – You make decisions about how your health care dollars are spent (or saved!).
- Flexibility – Money from your HSA can be used to pay for a broad spectrum of health care services including many services that are not covered by traditional insurance plans (dental procedures, laser vision surgery, and over the counter medications, to name a few).
- Portability – Money invested in your HSA belongs to you regardless of changes to your insurance plan or employment situation.
- Financial Security – You can direct your HSA contributions to mutual funds or other long term investment vehicles in order to maximize the accounts value over time.
How to Save Money On Health Insurance – Here are 5 simple steps to help you save money on health insurance. The benefits of HSA Plans are also explored.
Why Smart People Are Buying Health Savings Accounts – You can get a high-deductible health insurance plan without getting an HSA, but as you will see, HSAs have significant advantages that will appeal to the smart buyer.
Sage Benefit Advisors
1501 S. Lemay Avenue, Suite 200
Fort Collins, CO 80524
(970) 484-1250 Main