There seems to be common confusion around Health Savings Accounts, aka an "HSA". How do they work? Could this be a positive move for me? If I don't use it do I lose it? Here are some key points to know when considering an HSA and compatible health plan.
Tax Advantages - Contributions made to your HSA will lower your taxable income! We can all agree this is big!
It's your money - HSA accounts allow you to be in control. Even if you switch jobs, or health insurance carriers, the money stays with you!
Roll over - Each year you have an HSA, you are eligible to roll over all monies left! This means you could have thousands of dollars ready for an unexpected health even or accident.
Expenses - You can use your HSA dollars on services that might not be covered by your health insurance plan. Services like dental care, vision care, chiropractic services and more. (make sure your service is listed as a qualified expense)
Retirement - HSA balances can grow with interest depending on your bank and vendor. At age 65 you can use your remaining funds for anything without penalty.
While there are some tremendous advantages, there is no such thing as a one size fits all plan or program. Your situation may guide you in the direction of an HSA plan, or maybe not. We hope these points help you better understand your options.