How can a Health Savings Account (HSA) save me money?
Have you been trying to learn more about Health Savings Accounts (HSA) in Arizona?
If you’re like most people, you think Health Savings Accounts are too complicated to manage, or you have them confused with flexible spending accounts.
But talk to anyone who uses a Health Savings Account to pay for medical expenses and you will hear an entirely different story.
The truth is, if you take the time learn a little bit about Health Savings Accounts, you will wonder how you ever lived without one. Not only do these plans allow for more flexible coverage and lower out-of-pocket expenses, they can be used to reduce the amount of taxable income for individuals and families.
Do you qualify for a Health Savings Account?
Ever since President Bush signed the Medicare bill into law in December 2003, Health Savings Accounts (HSAs) have been helping individuals and families save for future medical expenses using tax-free dollars. Similar to Flexible Spending Accounts, participants specify a certain amount of money to be set aside and used to cover the cost of medical bills but, if you qualify, HSAs are a much smarter option.
In order to understand HSAs, it is important to understand why they exist. As health insurance costs have gone up, many individuals have been forced to buy High Deductible Health Plans (HDHPs) because the monthly premiums are lower.
Individuals can be eligible for Health Savings Accounts by meeting the following requirements:
Obtain coverage with a High Deductible Health Plan (HDHP)
Have no other form of health insurance
Not currently enrolled in Medicare
Cannot be claimed on someone else’s tax return as a dependent
While they provide first dollar coverage for preventive care services, HDHPs require patients to pay deductibles or coinsurance on major medical procedures before the insurance comes into play. Using a Health Savings Account helps these individuals save money, tax-free, so they can be prepared to pay these costs when needed.
Each year, the maximum amount that can be contributed to these plans is indexed with the rising cost of healthcare.