A Health Savings Account (HSA) can make psychological and medical services much more affordable. An HSA is an account that you can put pre-tax money into for future medical expenses, including counseling and psychological services. Banks, credit unions, insurance companies and other financial institutions are permitted to create a HSA for you. HSAs must be combined with a qualifying high-deductible health plan (at least $1,100 individual or $2,200 family deductible). This type of coverage usually results in lower insurance premiums. In turn, these savings on premiums can be used to fund the HSA if you like, providing significant cash that can be used towards the deductible or other healthcare costs. Any company that sells health insurance may offer qualifying high-deductible plans– call them directly for details.
HSAs have numerous benefits:
- Security against unexpected expenses
- Affordability- lower your premiums by choosing a high-deductible plan, then use some of the savings to fund an HSA monthly
- Savings- unused HSA dollars can gain tax-free interest
- Control- you make the decision about what provider to see, which expenses to cover from the HSA, and how much to contribute to the HSA
- Portability- you retain individual HSA ownership, so changes in your job, insurance provider, moving, etc. will not affect your HSA
- Tax Savings- HSA contributions can be made pre-tax, HSA savings grow tax-free, and medical cost withdrawals are tax-free
More info. about HSAs can be obtained here from the U.S. Treasury Dept. Especially check out the HSA Basics Brochure and Frequently Asked Questions.