Top 10 Reasons For Choosing an HSA Plan

Before you can enroll in a Health Savings Account (HSA) you first need to have a high-deductible health plan (HDHP).

A high-deductible plan is an affordable option for anyone who is self employed and forking over a lot of money for insurance. The plan is also a smart move for anyone out of a job and insurance.

But what about the average employee who is working for a medium- or large-sized company and already has health insurance?

Does the option of adding an HSA make switching to a high-deductible plan worth it?

The Way HDHPs and HSA Plans Work for You

• Purchasing a high-deductible insurance plan means lower premiums, an excellent way to save money on healthcare.
• Because your contributions to the fund are tax-free, you can enjoy considerable tax savings.
• The interest is tax-free and tax-deferred, so you can use Health Savings Accounts to supplement your retirement income as well.

The Top 10 Reasons for Choosing an HSA:

1. Tax Savings: You can deduct your qualified HSA withdrawals from your gross income on your federal tax return, even if you do not itemize deductions. Many states also allow the deduction from state income taxes.
2. Earned Interest: Funds in your HSA grow with tax-deferred interest.
3. Portability: You own your account, so even if you change jobs, your HSA funds go with you.
4. Affordable Health Coverage: Use your Health Savings Account to cover 100% of the cost of routine medical expenses like office visits, lab tests, and over-the-counter drugs.
5. Reduced Insurance Premiums: Your insurance premiums can be substantially lower when you change from a low-deductible plan to a high-deductible plan.
6. Long-Term Savings: Because your funds can roll over from year to year, you can let the funds in your account grow tax-deferred. That's why HSAs have been referred to as the "Medical IRA."
7. Retirement Bonus: After age 65, you may make withdrawals from your HSA for any reason without the 10% penalty imposed before age 65 for non-medical withdrawals. (Note: you'll still have to pay taxes on the money.)
8. Safety Net: There is no "use it or lose it" provision, so you can build up the savings in your HSA to use for major health events.
9. Coverage for the Extras: You can also use your HSA funds for programs not usually covered by other health plans, including dental, optical, and much more.
10. Empowerment: Take control of your routine healthcare decisions - you get to choose the healthcare and providers that you want.