Healthcare costs are rising every year. Premiums, doctor visits, and prescription drugs are becoming more expensive. One way to manage these costs is through a high deductible health plan (HDHP) paired with a health savings account (HSA). Understanding the benefits of a health savings account can help you take control of your healthcare spending—both now and in the future.
What is a Health Savings Account?
An HSA is a personal savings account. It works with an HSA-compatible health plan offered by your employer. You can use it to pay for qualified medical expenses—tax-free.* The benefits of a health savings account make it a smart choice for managing healthcare costs and planning for the future.
4 Key Benefits of Health Savings Accounts
- Tax Savings: Contributions to your HSA are tax-deductible. Plus, withdrawals for qualified medical expenses are tax-free.
- Lower Out-of-Pocket Costs: Use HSA funds to pay for eligible medical expenses. This can help you meet your deductible faster.
- Your Money Stays Yours: Unused funds roll over year to year. Even if you leave your job or retire, the money is still yours.
- Investment Opportunities: Once you meet a minimum balance, you can invest your HSA funds. This helps your healthcare savings grow tax-free.
Flexible and Convenient Options
HSAs are easy to use. You can contribute up to the IRS limit ($3,850 for single, $7,750 for family in 2023). Contributions can be made through payroll deductions or online deposits.
Paying for healthcare is simple too. Use your HSA debit card for prescriptions, doctor visits, and more. If you want to grow your savings, you can invest your funds in a variety of options that match your financial goals.
The benefits of a health savings account go beyond immediate healthcare needs. It’s a great way to save for retirement while managing medical expenses today.
*Tax references are at the federal level. State taxes may vary. Consult a tax advisor.
