Wouldn’t it be nice to know you had money in the bank to pay for a doctor’s visit, dental emergency or prescriptions? That’s just one reason to open and save money in a health savings account, or HSA for short. Here are five more reasons (if you have an HSA-qualified, high-deductible health plan):
- You have a high deductible – You may have to pay for some medical costs up to the deductible or beyond. With an health savings account, you can put aside money to cover it, if you need to.
- It can cut your tax bill – You don’t pay federal or Connecticut state income taxes on money you deposit into your HSA.
- You’ll be able to use your HSA to pay for many qualified medical expenses – Doctor’s office visits, hospital stays, urgent care, dental work, X-rays and prescriptions, to name a few. You can even use it for qualified medical expenses that your spouse or children (as long as you claim them as dependents) have. Even if they’re not on your health plan.
Update: In April 2020, the CARES Act expanded the list of qualified medical expenses to remove the prescription requirement for over-the-counter medicines and include menstruation products. The act, passed in response to the coronavirus (COVID-19) pandemic, made these changes effective Jan. 1, 2020.
- Someday, you may be glad you did – Healthy today? That’s great! You don’t have to spend your HSA dollars the year you saved them. You can earn interest on and even invest your HSA dollars. That’s money you’ll have when you need it in the future. Calculate your potential future balance.
- You want to retire one day – You can use HSA savings to pay for many Medicare premiums and other medical costs.
It’s tough to save, you say?
We know: there are a lot of things competing for your paycheck. A good rule of thumb is to try to save a little money from each paycheck. Save enough to cover medical expenses you know you’ll have. Plus, even if you spend the money you deposit into an HSA every year, you save money on income taxes. Calculate how much you might save.
Your health plan or your employer may help you open an HSA. Ask!
Some employers contribute to health savings accounts or even match some of their employees’ contributions. If that’s the case and you don’t have an HSA, you’re leaving money on the table.
Some health plans (ConnectiCare’s one) also work with a banking institution that offers HSAs. ConnectiCare works with HealthEquity. Members can pay their medical providers straight from their HSAs with a debit card, online or using a mobile app.
Find out more about health savings accounts from HealthEquity and read our post about five important things to keep in mind once you open an HSA.
Nothing in this communication is intended as legal, tax, financial, or medical advice. Always consult a professional when making life changing decisions. It is the members’ responsibility to ensure eligibility requirements as well as if they are eligible for the plan and expenses submitted.