SIX simple advantages to consider when thinking about a HDHP and HSA

Do you dislike paying taxes and dread high co-pays and procedure costs? Do you want to pay less money for insurance premiums? Then a high deductible health plan (HDHP) with a health savings account (HSA) may be a good option for you!

Below are 6 advantages of HSA plans. From tax savings and retirement investments to things you may not have considered as eligible products when using you HSA debit card.

1. An HSA can save you money through lower premiums and tax savings. The money deposited into your account can be used to pay your deductible and any other out-of-pocket medical expenses.
2. HSA contributions made through payroll are pre-tax, which lowers tax liability on paychecks. Also, interest earned on HSA funds is never taxed.
3. You won’t pay taxes on withdrawn funds if they are used for qualified medical expenses. When you reach age 65, you can use the funds for non-medical expenses with no penalty, but they will be taxed like a normal retirement distribution.
4. You own your HSA. It remains with you through job changes, insurance changes, and retirement.
5. You can use your HSA funds to pay medical bills, deductibles and co-pays for yourself, your spouse, and your eligible dependents.
6. HSA eligible expense also include the following: OTC medications & Women’s healthcare products, Sunscreen with an SPF of 15 and higher, Vision and Dental care, Smoking cessation products, Hearing aids, Hand creams & lotions formulated for eczema treatments, First aid products, Diabetes management and supplies.

Now, if you’re healthy and don’t have much in the way of medical expenses, you can think of your HSA as a long-term investment or retirement investment. You’ll have to stop contributing to it once you’re enrolled in Medicare, but the money that’s already in the account can continue to grow from one year to the next during your retirement. You can choose to buy private long-term care insurance in the future, but you can also treat the HSA as an investment for long-term care bills that may be incurred later in life. However, if you don’t end up needing long-term care, your HSA can be passed on to your heirs. Just like a retirement account. There are so many advantages to a HSA, and if you’re already enrolled in an HDHP, it’s in your best interest to set up an HSA and fund it. And if you don’t currently have HDHP coverage, it’s well worth considering as a future option.

Jessica Waller, Account Manager