You may have heard about an HSA and wondered what the fuss was all about. Well, if you work for an employer that provides health benefits, you might want to check on the next open enrolment period. Open enrolment is one of the few times you are allowed to make changes to your policy, and you might want to think about a Health saving Account (HSA). If you do not have employer provided insurance, you can look into other approved companies such as banks and credit unions.
The Medicare bill, to help people save for future medical expenses on a tax-free basis created health Savings Accounts. An HSA is a way to offset some of the costs of your health care services. The Health Savings Account allows you to put pre-tax money into the account to use for medical expenses. Some of the HSAs are set up to use it before the end of year or you will lose it, so check before enrolling. The tax benefits alone might make it worth your consideration.
You must be enrolled in a High Deductible Health Plan to be able to sign up for an HSA. With a high deductible plan, you normally save money on premiums and that money can easily be put towards the Health Savings Account. High Deductible Health Plans are sometimes called catastrophic health insurance coverage because it is in inexpensive plan that does not generally pay the first few thousand dollars of health care costs. The first few thousand dollars is your deductible. Because of this, the premiums are very cheap.
An HSA does not cost any money to start because it is a savings account that you deposit money into. The money that you put into the HSA is your money and you control it. There are rules to how much money can be deposited annually, so check with the U.S. Department of the Treasury for questions. Many employers will contribute to your HSA as well, so be sure to ask! Remember that the contributions to your Health Savings Account provide a tax benefit, even the money contributed by your employer.
Self-employed people are not able to make pre-tax contributions and are not allowed to take the amount of their HSA contribution as a deduction for SECA purposes. They are only allowed to make after-tax contributions and the above-the-line deduction.
Health Savings Account funds can be used for any "qualified medical expense", even if your High Deductible Health Plan doesn't cover the expense. Over-the-counter medications for example are covered by HSAs. HSA money can even be used to pay for medical expenses in other countries. In addition, the money spent from the HSA on qualified medical expenses is tax-free. IRS Publication 502 can assist you in making decisions concerning what the definition of qualified medical expenses is. Keep your receipts so you can defend yourself in case of an audit.
Overall, a Health Savings Account can be an additional way to provide financial stability to your household budget in case of an unexpected illness or injury. Find out more about HSAs on Threepiececombo.com today.