Health Savings Account
What is a health savings account (HSA)?
A health savings account is a new way for consumers to pay for health expenses. As of January 1, 2004, almost anyone with a qualified high-deductible medical plan can also have a health savings account. HSAs can save you money on your medical care now as well as provide a good way to save for future medical expenses. HSA funds can pay for expenses before you meet your deductible as well as helps pay for services not covered by your health plan, COBRA coverage during periods of unemployment, medical expenses after retirement and long-term care expenses, to name just a few of the benefits of having a health savings account.
Your high-deductible health plan can be one you get through your employer or a policy you buy on your own. Even if you get your high-deductible health plan through your employer, you own your health savings account. You decide how much to contribute, how much of the account to use for medical expenses, and which medical expenses to pay from your account. You also choose whether to pay for medical expenses from the account or save it for future use. Even if you change jobs, your health savings account is still yours.
You can keep the account even if you move to another state, and you can continue to keep it as you grow older. Regardless of where you get your health insurance plan, whether on your own or through your employer, your health savings account funds are yours.
Unlike some other types of accounts, you don't lose health savings account funds at the end of the year. Unspent balances remain in your account earning interest until you spend them on medical care. This will be a strong incentive for you to spend wisely on your medical care, just like you do on other items you purchase. You'll want to shop around for the best value for your health care dollars before you withdraing funds from your health savings account.
Additional info about having a health savings account (HSA)
* Newly available as of January 1, 2004
* Available to almost everyone if they have a qualified high deductible health insurance plan
* With a health savings account, the health plan is paired with a savings account to cover eligible medical expenses not covered by the insurance policy
* Individuals who are covered under another health plan that is not a qualified high deductible plan aren’t eligible to contribute to a health savings account
* Specified disease coverage, hospital indemnity, auto insurance, Employee Assistance Programs, Disease Management, and most wellness programs do not count as other coverage
* Vision, dental, accident, disability and auto insurance also do not count as other coverage
* If you are covered by your spouse’s plan and it is not a qualified high-deductible plan, you are not eligible, even if you have your own qualified high-deductible plan. A health savings account is not an option.
For more Health Saving Account resources visit HSAcenter.com