Health Savings Accounts (HSAs) enable you to pay for current health expenses and save for future medical and retiree health expenses on a tax-free basis. Generally, an adult who is covered by a high-deductible health plan may establish an HSA. A Health Savings Account is an alternative to comprehensive health insurance; it is a savings vehicle that allows people a different way to pay for their health care.
Health savings accounts are like personal savings accounts, but the money in them can only be used for health care expenses. You only, not your employer or insurance company, own and control the money in your health savings account. To be eligible to open a health savings account, you must have a special type of health insurance called a high-deductible plan.
- On average, you will pay lower premiums than with traditional health plan options.
- You decide when you want to use your savings to pay for or reimburse yourself for eligible medical expenses.
- Your account is portable, meaning your money stays put even if you change jobs or change medical coverage.
Health Savings Accounts can be established at many banks so shop around to find out. Find one that has no setup fees, no monthly deposit requirements and no minimum balance so you can open it with a small deposit and possibly add other amounts later. Generally there will be minimal monthly fees in the range of $2-$3 but HSA’s are well worth researching and paying a visit to your bank.