Security High deductible insurance and HSA protects against high or unexpected medical bills.
Affordability Lower health insurance premiums by switching to health insurance coverage with a higher deductible.
Flexibility Use the funds to pay for current medical expenses, including expenses insurance may not cover, or save the money future needs, such as:
- Health insurance or medical expenses if unemployed.
- Medical expenses after retirement (before Medicare).
- Out-of-pocket expenses when covered by Medicare.
- Long-term care expenses and insurance.
Savings Save the money for future medical expenses and grow
the account through investment earnings.
Control Individuals make all the decisions about:
- How much money to put into the account.
- Whether to save the account for future expenses or pay current medical expenses.
- Which medical expenses to pay from the account.
- Which company will hold the account.
- Whether to invest any of the money in the account.
- Which investments to make.
Portability Accounts are completely portable,
individuals can keep their HSA even if they:
- Change jobs.
- Change medical coverage.
- Become unemployed.
- Move to another state.
- Change marital status.
Ownership Funds remain in the account from year to year, just like an IRA. There are no use it or lose it rules for HSAs.
Tax Savings An HSA provides triple tax savings:
- tax deductions when contributing to the account;
- tax-free earnings through investment; and,
- tax-free withdrawals for qualified medical expenses.
Next: What Happens to an HSA at Death?
Previous: Using Your HSA
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