What Are the Main Benefits of a Health Savings Account (HSA)?

Image by Gerd Altmann from Pixabay

It is not exactly a secret that the cost of medicine has gone up significantly during the past few years. At the same time, there are ways for you to save money on the cost of your medical care, and that includes a health savings account. This is typically an account that you and your employer will put money into, and you can use the money to pay for qualified health expenses. What are some of the top benefits of an HSA? Take a look at a few important points below, and consider starting an HSA for yourself and your family.

1. You Can Save Money on Your Taxes

One of the biggest benefits of opening an HSA is that you can save a significant amount of money on your taxes. Nobody should have to pay more money in taxes than is legally required, and you might be able to reduce your tax liability by opening a health savings account. The money you put into your HSA goes in before taxes. That means that the money you put into your HSA reduces your taxable income. As a result, you can save money on taxes. The exact amount of money you will save will depend on your tax bracket, and there could be contribution limits depending on how much money you made. If you are curious about exactly how much money you can save on taxes with an HSA, you should reach out to an accountant who can help you.

2. You Can Pay for a Variety of Medical Expenses

Of course, the biggest benefit of an HSA is that you can use the money in the account to pay for your medical expenses, meaning that you may be able to save money throughout the year. There are different types of medical expenses that fall under the category of an HSA. For example, you may be able to use the account to pay deductibles, co-pays, and coinsurance. You might also be able to use the money in your HSA to cover expenses that your plan doesn’t cover, such as eyeglasses, dental care, and orthodontics. You may want to reach out to an expert who can help you figure out exactly what is covered and what is not.

3. You Can Use Your HSA as an Investment

If you decide to put money into your HSA, it will work harder for you. For example, depending on the HSA you open, you do not necessarily have to pay income tax on the interest that it earns. In addition, if you have money in your HSA that you do not use at the end of the year, it may be able to roll over to next year. Finally, you may decide to take the money in your HSA and save them for the future. If you allow the money in your HSA to sit there until you turn 65, you may not have to pay a penalty on the money you withdraw for non-medical expenses.

4. You Have Plenty of Flexibility

Finally, you have plenty of flexibility regarding your HSA because you are in control. What this means is that you control how much money you spend, how much money you save, and what you do with it. The money in your HSA is yours forever. You don’t have to worry about the money expiring, and you can even take it with you if you decide to change jobs or switch to a different health plan. You don’t have to worry about surrendering it in the future.

Open an HSA Plan

Ultimately, these are just a few of the biggest benefits of opening a health savings account. Because there are so many benefits to keep in mind, you must make sure you work with a professional who can help you set up the right one. You need to think about the types of medical care you need, what your family requires, and the different options provided by your employer. Keep in mind that you may be able to open one on your own if you are willing to work with an expert. If you want to save money on the cost of your medical care, consider opening an HSA.