PROVIDENT FINANCIAL CONSULTANTS, LLC

8 Things To Know About A Health Savings Account

If you have a high deductible health insurance plan, opening a Health Savings Account (HSA) is a good way to help pay for medical expenses.  “The tax savings and sheer flexibility of HSAs really make them a wise choice for anyone with a high deductible health insurance plan,” says Cassandra Dorn, Wealth Advisor with Provident Financial Consultants in Oshkosh.  “Even if your employer doesn’t offer an HSA plan, your insurance plan might still qualify you to open an HSA.  Here are some of the best perks and facts of HSAs that you’ll want to know:

  • HSAs are tax deductible.  Any contributions to your HSA are tax deductible, and are distributed for qualified medical expenses tax free as well.
     
  • Some HSAs offer investment options and any capital gains are tax deferred.
     
  • HSA funds can be used for your spouse and dependents that you claim on your taxes, even if they’re not on your insurance plan.
     
  • HSAs can grow over the years.  Funds in an HSA can be rolled over from year to year, allowing you to grow a tax free savings account for medical expenses.  There are annual contribution limits of course, but you don’t lose the funds in the account if you don’t use them, as you would in a Flexible Spending Account.  For instance, I know my daughters will need orthodontic work at some point, so I put money in my HSA every year.  Even though I don’t use most of it at this time, I know I will when they’re older or in case of a medical emergency.
     
  • Annual contribution limits.  Individual coverage has an annual contribution limit of $3,450 and family coverage has an annual contribution limit of $6,850.  Both coverage plans allow people age 55 and over to contribute an additional $1,000 as a “catch-up” contribution.
     
  • Payment flexibility.  You can pay out of pocket for medical expenses and be reimbursed or pay directly out of your HSA.  Not only that, but you can use HSA funds to be reimbursed for medical expenses incurred years earlier, as long as you had established your HSA prior to the expenses.
     
  • They offer an extended contribution deadline.  You can fund HSAs through April 16th of the following year and deduct it from your income.  For example, when filing your 2017 taxes, you can deduct any contributions to your HSA up until the time you file your taxes in 2018, or the filing deadline in April.
     
  • Regularly funded HSAs offer peace of mind.  Generally speaking, you don’t get medical bills unless something goes wrong.  In those stressful moments, HSAs can help relieve the burden of a high deductible health plan.

As a Wealth Advisor for the Oshkosh area, I implore my clients to always be as prepared as possible for life’s “what-ifs”, and an HSA is a great tool to have in place to utilize throughout the years for your entire family,” notes Cassandra. 

Be proactive when it comes to preparing for your financial future and schedule a consultation with Cassandra today by calling 920-230-6898.