Are You Using Your HSA Wisely?

Health Savings Accounts (HSA) continue to grow in popularity. These HSAs are tax-advantaged savings accounts that can be used for your health care expenses. Paired with a high deductible health insurance plan, an HSA can help provide some security for your health care costs and limit out-of-pocket expenses.

HSA Advantages

Tax benefits in an HSA are huge. Deposits come straight of each paycheck, so the money you contribute is pre-tax, and the interest that accumulates in the account is tax-free. The money withdrawn from an HSA is not taxed either if it is used for medical expenses. This provides HSA users with triple tax benefits!

Unspent dollars in an HSA rollover to the next year. Money that goes unused during a given year will remain in your HSA account and rollover to the next year. You can also make bulk contributions to your HSA at the end of the year to save on taxes. The IRS limits for HSAs in 2019 will be as following:

Self-Only: $3,500 (up from $3,450 in previous year)
Family: $7,000 (up from $6,900 in previous year)

So Are you Effectively Using Your HSA?

People use their health savings accounts a little differently based on their needs. One of the major benefits of an HSA is the flexibility it provides in spending. To make sure you are using your HSA wisely, you should remain conscious of the funds being contributed into your account. Ask yourself: What are you contributing? Is it enough? Or are you constantly draining your funds? Gaining an understanding of your spending habits will allow you to determine what you should be contributing into your account each year. Keep in mind the triple-tax benefits provided in an HSA account and that money rolls over.

Some consumers plan on reimbursing their eligible expenses later instead of using their HSA debit cards. If you plan on doing this, make sure you are keeping all your receipts for accurate recordkeeping.

You should also be shopping around for your health care needs when on a high deductible health plan, as your rates are no longer stable like in a co-pay plan. Service costs can vary greatly by location, so a little research and discovery call to your doctor’s office prior to a visit can go a long way.

So is an HSA Right For You?

HSAs come with advantages, but may not be right for everyone. Whether an HSA is right or not for you can depend on a variety of factors including lifestyle, chronic conditions, and age. Contact Us today to find out what plan works best for you!