HSA Account

We all need health insurance with great coverage, but we also want to save money. The challenge is to get both. With a health savings account, you can minimize your expenses while still ensuring your financial security. Health savings accounts, or HSAs, are typically used in conjunction with a high deductible health plan.

To learn more about the advantages of an HSA account, contact an independent agent in our network. Your agent can compare health savings account policies, options and quotes from several companies and help you choose the best plan for you.

HSA Account Statistics

• In January 2012, 13.5 million people had a health savings account
• 50% of enrollees were male and 50% were female
• Individuals 40 and over made up 49% of those enrolled in a health savings account
• California, Texas, Illinois, Ohio and Florida had the highest level of health savings plan enrollment

Understanding the Health Savings Account

An HSA account works like a medical savings account. You combine a high deductible health plan (HDHP) policy with an HSA bank account, both of which help pay for healthcare. 

Until your deductible is reached on your HDHP, you can use your HSA account to take care of expenses like co-pays and health care costs. Some HSA insurance plans will provide full coverage for preventive care without needing to meet deductible requirements.

Make sure you understand the limitations of your policy because health savings accounts have pros and cons as well as some rules. For example, you must be enrolled in an HDHP plan with no other health coverage. 

Health savings accounts cannot be supplemental insurance. This also means that you cannot participate in Medicare or be claimed as a dependent. You can also only use your health savings to pay for qualified medical expenses, which are determined by your insurer.

Understanding HSA Contribution Limits

One of the biggest advantages of utilizing a federal health savings account is the tax free status you enjoy. Contributions that you and your employer make are excluded from your gross income and your savings are allowed to grow without being taxed. 

Qualified medical expenses are also tax-free and you can claim them as deductions on your tax return.

Because of this tax exempt status, there are certain regulations that limit contribution and deductible amounts as well as out of pocket limits.

Regulations for individuals in 2016:

• You can make contributions your your account up to $3,350
• You must have a minimum deductible of $1,300
• Out of pocket expenses cannot exceed $6,550

Regulations for families in 2016:

• You can make contributions to your account up to $6,750
• The minimum deductible is $2,600
• Out of pocket expenses cannot exceed $13,100

Note that out of pocket expenses do not include the amount you pay in premiums.

Understanding Your HSA Funds

Your HSA account acts as a health care savings account which you can deposit into and withdraw from, as needed. Not only do you get to take advantage of the tax exempt status, but the money rolls over from year to year. 

Any money left in the account gains tax free interest. If you don’t use all your funds, there’s nothing to worry about. At 65, you can use your HSA funds for anything you want, and the distribution will not be subject to tax.

Purchasing an HSA health insurance plan has many advantages, but understanding the details of taxes and investment can be challenging. A local independent agent in our network can answer your questions and help you determine if this is a good option for you.

Who Needs an HSA Account?

An HSA account isn’t for everyone, and you should assess your healthcare needs before you invest in one. If you have regular out-of-pocket medical expenses and they are costly, a health savings account may not be for you. 

Meeting the high deductible may keep you from contributing the maximum amount to your HSA account, which minimizes the benefits.

On the other hand, if you have low healthcare costs and rarely visit the doctor, HDHP/HSA insurance plans may work well for you. You can choose the amount of money that you contribute to your HSA account and some employers will match this. 

The flexibility of contribution levels and low premiums makes an HDHP/HSA insurance plan an affordable healthcare option for many.

If you’re still unsure whether an HSA account is right for you, contact an agent in our network. Your agent can help you get the best policy at the best price by comparing multiple insurance companies to find the right fit for you.

Contact a local independent agent today for personalized assistance with your health savings account, healthcare, and medical coverage questions and concerns.