What’s An HSA?

A Health Savings Account, or HSA, is a savings account where you can invest money for future medical expenses. But it’s not a health insurance plan — it's a way to save money for healthcare.  

HSAs act a lot like other retirement investments. The funds that stay in the account from year to year earn interest and build in value. And because you can put funds in the account right from your paycheck, it will go in before your income is taxed.

Setting Up An HSA

Many people set up their Health Savings Account with their employer’s fringe benefits program, so they can take deposits straight from their paycheck before taxes. You can also set one up on your own — you just have to claim your HSA deposits on your tax return. Either way, having an HSA is just like paying less taxes and getting extra money from the government to pay for healthcare.

But before you can set up an HSA, you’ll need to find a high deductible health plan —a policy with a deductible of $1,050 or higher. Most people choose a high deductible PPO. But a high deductible doesn’t mean more expensive healthcare, because a high deductible almost always means a lower monthly premium.

Take Control Of Your Healthcare

The funds in an HSA can be withdrawn at any time for just about all healthcare costs — and the withdrawals will be tax-free. But you can only use your savings for health-related costs — otherwise there’ll be a hefty tax-penalty. But after you turn 65, you can withdraw the money for any reason.

Your invested savings can be used for plenty of healthcare expenses. Here are just a few examples:

• Deductibles
• Medical supplies, from eyeglasses to medications
• Dental, vision, and hearing care services

 
And to withdraw money, you’ll use a debit card or checkbook to pay for your health expenses — depending on the HSA you get.

Find Both Your HSA and HDHP

HSAs can be a great way to pay for healthcare — but they aren't for everybody. Our professional agents will help you make an educated decision, so you find the plans that are right for you.

When you’re ready to start comparing plans, use our free quote service. You’ll be able to look at high deductible health plans online in just minutes.