More HSA Health Savings Account Basics For Health Insurance

WHAT IS AN HSA or Health Savings Account?

I have divided this post up into three blogs. The first one is a basic outline so you understand the two parts of an HSA. The second part outlines some advantages to using a Health Savings Account Plan for your medical insurance. The last part tells you where to get more information!

Part 1: Is an HSA Health Insurance?

If you are shopping for health insurance, you have probably noticed a major medical insurance product called an HSA or Health Savings Account. An HSA is not actually insurance, but is an account that would be obtained with an HSA compatible Major Medical Insurance Plan. So we are talking about two parts of an HSA program here. One part is the Major Medical Health Insurance for your larger expenses, and the other is an investment, retirement, or savings account you can use on health purchases.

Part 2: Why would I want an HSA Account?

HSA plans make sense for many people. You can contribute, according to IRS guidelines to your HSA account. You will be able to deduct the allowable amount from your taxes. You can use this money to spend on any qualified purchases - some that might not even be covered by your major medical. However if you remain healthy, and do not need to take the money out - you keep it!

I have had clients who spent a considerable some on a lower deductible health insurance plan and then felt cheated because they had not used their plan very much. Well, I think that they were lucky to stay healthy! However, I can see their point. So I would be happy to give them the option to spend less on a much higher deductible health plan. That would also give them the security of knowing they will have health insurance in case of any major illness or injury! They can also choose to make contributions to their HSA, have a tax break, and know that if they don't have to spend the money, it will keep rolling over.

Part 3: Learn More About HSA's From Uncle Sam

I always like to go right to the Horse's...er Mouth ... when people ask me questions about taxes and/or the law. To learn more about HSA's you should go right to the Government.

Here is a link to the Dept. of the Treasury publication.