When you get sick, the last thing you’ll want to worry about is how to pay for medical expenses. Healthcare is generally expensive, which can add stress to an already stressful time. Fortunately, this anxiety can be avoided with a Health Savings Account (HSA).
What is a Health Savings Account?
In concept, HSAs are similar to personal savings accounts; HSAs are accounts that are used to save money which will only be used for healthcare expenses. The owner of the account, rather than employer, is the person who controls the money. In addition, money put into this account is not taxed.
Am I eligible for a Health Savings Account?
In order to open an HSA, you must have a special type of health insurance called a high deductible health insurance plan (HDHP). According to Nerdwallet, “For 2017, the IRS defines an HDHP for an individual as a plan with an out-of-pocket maximum of $6,550 and a minimum deductible of $1,300.” This means that if you have this type of high deductible insurance, you would need to pay $1,300 in medical expenses before your insurance company will pay for a claim.
What can a Health Savings Account be used for?
The funds found in your HSA can be used for a multitude of out-of-pocket costs, such as medical, dental, or vision payments. However, HSAs can’t be used to pay health insurance premiums.
How do I open a Health Savings Account?
Typically, Health Insurance Providers can provide you access to an HSA. If this is not available with your particular healthcare provider, you can open an HSA account at most financial institutions.
What are the benefits of a Health Savings Account?
Rather than someone else making decisions regarding your HSA, you completely control your HSA; this means you are able to determine how much money to set aside for health costs and you control how the money in your HSA is spent. At the end of the year, you control what happens to any unused money. While your employer can have access to your HSA to make contributions, you maintain control over your money, even if you change jobs.
Is it possible to withdraw money from my Health Savings Account for a non-medical purpose?
Yes, owners of HSAs are able to withdraw money for something other than a healthcare expense. Keep in mind that a 20% penalty may apply to any early withdrawals.
Is a Health Savings Account right for me?
If you are a person that doesn’t typically get sick, or if you’re close to retirement, then an HSA may be the right plan for you. Opening an HSA will allow you to save for medical costs that you may encounter later down the road.
However, as the Mayo Clinic puts it, “If you think you might need expensive medical care in the next year and would find it hard to meet a high deductible, an HSA might not be your best option.” In order to assess the costs that could arise in 2017, it may help to take a moment to look at last year’s medical expenses.
How can I pay the high deductible on my HDHP if a minor medical emergency arises?
If you open an HSA and an unexpected minor medical emergency occurs, you may want to consider utilizing a Payday Loan or Title Loan to meet the deductible. At Cash Fast Loan Center, we quickly get you the money you need to stop worrying about finances and start focusing on feeling better. Visit one of our locations or contact us to learn more!