ISG Benefits and Insurance Services Blog
Healthcare costs are increasing by the minute, and many working Americans are trying to cope. If you can relate to this, then perhaps you will need health savings accounts or HSAs. HSAs will allow you to save and invest money that you can use to cover your medical expenses later. These expenses include doctor visits, medical equipment, and prescriptions. Here are five essential things about HSAs that you should know.
HSAs are Triple Tax-Advantaged
HSA contributions are on a pre-tax basis, just like traditional 401(k)s and IRAs. It means that you could save your money at present, and you can make a contribution of up to $3,500 to your HSA as an individual. You may also contribute up to $7,000 if you opt for the family option. Once you're 55 or older already, you'll get an extra $1,000 on top of your individual or family limit. The important thing is that the IRS can't tax you on the year that you contribute to your HSA.
HSAs are More Flexible Compared to FSAs
An FSA, or a flexible spending account, can have you contributing to something that may force you to spend down your balance towards the end of your plan year. In other cases, the FSA can forfeit your money. However, with an HSA, there’s no compulsion to use up your balance every year. You have the opportunity to invest the excess balance and retain your funds for medical needs in the future.
Not Everyone Can Qualify for an HSA
There are quite strict rules for becoming eligible for HSAs. You should have a high-deductible health insurance plan in order to qualify. That should mean either an individual coverage of $1,350 or a family coverage of $2,700. You should also have at least $6,750 as your out-of-pocket minimum for an individual account, or at least $13,500 for your family account.
Your Employer May or May Not Offer This
Your employer might offer you an HSA but with matching 401(k) plans. However, if he doesn't provide you an HSA option, then you can find your own plan with a financial institution. Besides, your employer’s offer may come with high fees as well as limited investment options. In that case, you’d better find an HSA plan on your own.
Some Final Words
It may be tough finding a plan that suits you, but having a dedicated HSA can help you a lot with your medical costs. That could make your medical expenses less burdensome. Read a lot about the function of HSAs and check out if you're eligible for one.
At Insurance Savings Group, we do our best in making sure that our clients are well-protected with affordable and comprehensive policies. We make sure to go the extra mile to help you with your needs. To learn more about how we can help you, please contact our agency at (661) 432-1474 or Click Here to request a free quote.
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