Why Choose A Health Savings Account?

Health Savings Accounts, or HSAs, are tax-free bank accounts where you can save money for your health care expenses. HSAs help put you in control of your health care costs - you direct your HSA funds to the health care you choose.

Let's take a closer look at Health Savings Accounts to see if they're right for you.

How An HSA Works

The funds for an HSA can come straight out of your paycheck - before taxes. Any money saved in an HSA from your check is an entire portion of your income that's completely tax-free. No taxes when funds go in - and no taxes when the funds are withdrawn, either.

Every year the funds roll over and build interest. That means your HSA can be used as a long-term investment account. Once you turn 65, your funds can be withdrawn for any reason - health-related or otherwise.

But before you're eligible for an HSA, you'll need to enroll in a high-deductible health plan (HDHP). Here are the features of an HDHP:

• A plan qualifies as an HDHP if it has a deductible of at least $1,100 for individuals and $2,200 for families

• HDHPs have lower monthly premiums than many other plans. That's because the higher deductible is, the lower the premiums will be. And you can use your HSA savings to pay the deductible.

• Catastrophic coverage for emergencies and many hospital costs. Some HDHPs even "waive" the deductible for preventive care such as routine doctors' visits and physicals.

You can also transfer additional funds to an HSA from an Individual Retirement Account (IRA), Flexible Savings Account (FSA), or another health account. But you have to make sure you're planning to keep your HSA if you decide to transfer funds. Once you make the transfer, you are required to maintain HSA eligibility for one year. If you were to switch to a plan with a lower deductible beforehand, your savings will be taxed as regular income and you'll be hit with a 10% tax penalty on top.

Your HDHP and Health Savings Accounts can help keep your health care costs under control - and keep your health insurance plan within your monthly budget.

Are Health Savings Accounts right for you? Use our secure form and view quotes online here.