Unlock The Power of Health Savings Accounts: Savings, Growth and Tax Benefits Explained

Are you confused about Health Savings Accounts – or HSAs - and whether they’re the right choice for you and your family?

Maybe you’ve seen those three letters as an option at open enrollment time – but you haven’t elected to take advantage of an HSA because you aren’t sure what it is or its benefits.

So let’s break it down.

An HSA is a tax-advantaged account you can use to save for medical expenses.

It's only available if you have a qualified high-deductible health plan.

And even if you ARE eligible, HSAs are not for everyone. If you or your family have high medical costs, an HSA might not be the best plan.

However, if your family is generally healthy and you rarely visit the doctor, an HSA can save you money on monthly premiums and allow you to build a significant healthcare fund.

If that’s you – let’s dig a little deeper into those advantages:

With an HSA, you'll pay lower monthly premiums, but you'll need to cover medical expenses until you reach your deductible. For occasional doctor visits, this can still be more cost-effective compared to regular health plans with higher premiums.

HSAs allow your money to grow tax-free over time. You can save for years and withdraw a lump sum for medical expenses later. Some people even use HSAs as a secondary retirement account, letting their contributions grow and then using the funds for medical expenses in retirement.

In fact, we encourage people to max out their HSA first – then max out their retirement accounts because HSAs uniquely offer a triple tax advantage. Contributions are tax-deductible, withdrawals for qualified expenses are tax-free, and the interest earned is not taxed.

You can also get reimbursed for your healthcare expenses out of your HSA. So you could hold on to your receipts for qualified out-of-pocket medical expenses – while letting your HSA grow – then get a one-time reimbursement later on.

The bottom line is, HSAs can be a powerful tool for the right situation. So you need to evaluate your family’s healthcare needs and financial situation to determine if it’s right for you.

And we can help! Just download our HSA info sheet.

HSA Cheat Sheet

We know all of this can be confusing and stressful. Accountabilities has you covered!