Save Money with a Health Savings Account

A health savings account is a good thing to have when you use a health insurance plan. It does not matter if you use a plan through your work or if you pay for it yourself you can use a health savings account. If you have health insurance through your work, a health savings account may be part of your plan. If it is not, or you pay for your health insurance yourself you still have options. Learn more on how you can save money with a health savings account.

What is a Health Savings Account?

The first thing you need to know is what a health savings account is and how you can save money with this type of account. These types of accounts must be attached to a high-deductible health plan and they must be used to pay for medical, dental, vision, or prescription charges that are either not covered because of your deductible or you can use it to pay for the amount that is your responsibility. The health savings account also gives you an opportunity to save. It allows you to put a small amount of money aside each pay check without you even noticing it. Over time it builds up and is available for your future medical needs. Some companies even allow you to invest a certain amount of this money which creates additional funds.

How to Set up Health Savings Account

It is important to know that when you set up a health savings account the dollars are tax free. Equally important to know is that  you cannot claim these  as deductible at the end of the year. If you use all of your money and still have claims you are paying on, you can use those on your taxes. Be sure to keep all receipts so you can show which were paid for by the health savings account and which ones were not.

Save Money

Unlike a flexible spending account you do not lose the money left over at the end of the year when you use a health care account. There is no concern when it comes to putting money into this account because it will always be available. When you use a flexible spending account any money left over after the end of the year will be lost. This is why you have to be very careful how much you put into it. A health savings account allows you to roll that money over from year to year. You now have the ability to adjust where needed so you have enough each year. This is a great way to save money since you are only putting a small amount aside from each pay check. Some companies even allow you to invest a portion of the funds which creates even more savings for you!

Additional Benefits of Health Savings Account

One last benefit of a health savings account is the stress-free experience when you visit the doctor. You will not have to worry about bills since the money is in your account ready for your use. When you have a high deductible policy your deductible could range from $2500 to $5000 or more. This might be difficult to pay for out of pocket. This is where a health savings account comes in handy.

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Bottom Line

There are many advantages to using a health savings account when you have a high deductible health insurance plan. When you look at the advantages and compare them to the disadvantages you will see they don’t compare and you will want to use this account if you have the option. You will have less stress and you will not have to worry about paying the bills when you go to the doctor or have a prescription to fill. You will not lose the money you put aside into your health savings account. Therefore this is a smart way to put a small amount of funds aside each pay period that you might not have saved otherwise.

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