HSA’s Explained – Part 1

Are you funding an HSA?

A Health Savings Account is a great way to manage the cost of healthcare. It covers certain medical expenses while helping you save money and strengthen retirement planning. HSAs were established for those who elect to have a high-deductible health insurance plan. They allow for automated savings, so cash is available to cover higher deductibles. Imagine you have a $5,000 deductible on your health insurance policy. You must be prepared to cover that for medical care. An HSA is intended to help you have this amount set aside. Here’s how it works.

Funds are deposited into a restricted-use account for future medical needs. You set the amount from payroll deductions. If you don’t use it often, the funds can be invested to grow and increase for future needs. The money is tax-exempt – a major benefit over a personal savings account. There are limits to the amount you can contribute annually. At age 55, catch-up contributions are allowed as long as you’re not enrolled in Medicare. Prior to using your HSA, make sure you understand the eligible and ineligible expenses. Keep good records and track your contributions to claim your deductions. This will make tax filing easier. Those with high medical needs may benefit from plans with lower deductibles and copays. However, this disqualifies you from participation in an HSA. Everyone must seek the route that best suits their unique needs, and ultimately, the Lord for guidance in decision-making.

And if your medical expenses have caused credit card debt, Credit Counselors can really help. They’ll create a debt management plan specifically for you. For more information, visit online at crown.org/ccc.