HSAs provide amazing advantages to individuals and families of all income levels—particularly as vehicles to build “rainy day” medical savings and reduce the financial impact of medical bills. While there’s a lot to know about HSAs, let’s start with the basics.
What they are
HSAs provide a handy way for you to save for medical expenses and reduce your taxable income. HSAs, or health savings accounts, are tax-advantaged savings accounts that can be used to pay for all qualified medical, dental, vision, and prescription expenses.
How they work
Your HSA funds are made up of HSA tax-free contributions and are used to pay for current or future qualified medical, dental, vision or prescription expenses for you and your dependents. This includes deductibles, copays, and coinsurance, plus other qualified medical expenses not covered by your plan–think bandaids!
Contributions are usually made by you, your spouse or your employer, (or even MotivHealth). If you have an HSA through your workplace, you’re also able to set up easy, automatic contributions directly from payroll. You can decide how much to contribute to your HSA, but you can’t exceed government-mandated maximums.
When a medical expense arises, you can use your HSA Debit Card (provided by your health plan), or checks linked to your HSA balance, for easy access to your health savings.
The HSA advantage
Health security: HSAs allow you to prepare for current and future medical expenses giving you health security and a future financial asset.
Triple-tax advantages: All HSA contributions, payments, as well as interest and investment earnings are tax-free.
Always yours: Your HSA funds will always belong to you. They never expire and remain accessible even in the event of a job change or retirement.
Benefits now & later: Once you turn 65, HSAs act like a 401(k) in that funds deposited can be withdrawn for non-qualified medical expenses and are only subject to your current income-tax rate.
Convenience: Your HSA debit card offers you easy access to your health savings and gives you a 20% to 35% discount (depending on your tax rate) on every qualifying item that you purchase.