A health savings account, or HSA, is one of the best investments you can make towards securing medical and healthcare when you need it most. While some employers do contribute to your HSA, you own the account and all the funds in it. If you are changing jobs and are concerned about the future of your HSA, you can rest assured with complete peace of mind that you will not lose your HSA or any of the funds that have accumulated to date. Join us as we look at the ins and outs of a good HSA and why you should start one today.
What is an HSA?
A health savings account functions like a savings account but can only be used to pay for medical expenses. Acting as a stand-alone account apart from your health insurance plan, monthly contributions are made to the account.
They can be used at any time to cover various medical expenses, including diagnostic testing, specialist doctor visits, medication, and more. For those who do not have a health insurance plan, it is a great way to build up a savings account for any unforeseen medical emergencies or issues that you may be faced with.
How can I use my HSA?
If you are wondering why an HSA is so important, it can be used to cover any of the following medical expenses for yourself, your spouse, and any children listed on your HSA:
Eligible healthcare expenses include doctor’s visits, sanitary products, over-the-counter and prescription medication, and even adult diapers.
Dental care includes dentist visits, orthodontics like braces or retainers, and in some cases, dental surgery.
Optometrist visits and vision care for you and your family are also included. An HSA can be used to pay for your eye test and can also be used to cover the cost of your prescription glasses or contact lenses.
For a full list of the eligible expenses, visit your HSA provider’s website for more information. You will also find information on doctors who prescribe to the HSA program.
What are the Benefits of an HSA?
From tax benefits to the monthly contribution amount, there are many ways in which having an HSA can benefit you.
Benefit #1: Tax benefits of an HSA
An HSA is 100% tax-deductible and offers tax-free interest earnings for money spent on healthcare. Should you need to withdraw your funds at any time, you will not be charged any tax on the amount.
Benefit #2: Monthly contribution amount
The IRS has contribution limits that put a limit on how much you can contribute to your HSA. Currently, this amount is an annual contribution of $3,600, which works out to monthly payments of $300. Your employer can pay this amount in part if they offer that as a benefit. If your spouse or family are listed on your HSA, the annual contribution amount is increased to $7,300.
Benefit #3: There are no time constraints applied to an HSA
While most health insurance plans have a time frame in which you can make use of medical benefits, an HSA does not. Any money remaining in your HSA that has not been used within one year rolls over to the next and can be considered extra funds for any healthcare costs.
Benefit #4: You own your HSA
An employer may contribute to your HSA as a company benefit, but you are the sole owner of the account and the available funds in that account.
There are, of course, many more benefits that you can enjoy when contributing to an HSA. But the most important benefit remains the peace of mind that you are afforded by knowing that your medical and health expenses are taken care of in times of need or an emergency.
HSAs are fantastic for covering any out-of-pocket expenses that may arise, even when you are on a medical insurance plan. Speak to your financial adviser about your financial needs and find the HSA that meets your and your family’s healthcare needs.
Do you Lose your HSA when you change Jobs?
An HSA is fully portable and the funds can be carried over to your next job. Your new employer might contribute to the fund as a part of your employee benefits but does not own the rights to the account or the funds in the account. Companies don’t need to contribute to employee HSAs, but many do to reduce the number of sick days taken, which affects productivity and profit margins.
It is important to know of the benefits attached to a company when applying for a job, so use your interview time to ask if they do, in fact, contribute to health savings accounts. This allows you to better plan for your future and be fully aware of the costs and contributions associated with your HSA.
It is often when we least expect it that disaster strikes or accidents happen. If you are changing jobs, you should continue to contribute to your HSA rather than withdraw the funds. An HSA can grow, and ceasing your monthly contributions will not allow the account to reach its full potential in covering those last-minute medical expenses.
When times are tough, we often have to look at ways of cutting expenses where we can. It is crucial to remember that an HSA is not just another expense and should be considered a must-have rather than a nice-to-have. You never know when a time will arise that you will need those funds in an emergency, so keep on with your contributions to possibly save you thousands of dollars in medical bills and expenses down the line.
An HSA is possibly one of the best accounts to have to cover any day-to-day or out-of-pocket medical expenses that have a tendency to rear their ugly head at the worst possible time. While your employer can make monthly contributions to your HSA, it is not compulsory and falls under a company’s employee benefits scheme. You own your HSA along with all the funds in it and can take it with you to your new job should you change careers at any time.