When an employee is looking for a health insurance plan, he might have seen that his employer is offering a Health Saving Account (HSA) option.
Health Savings Account is the least expensive plan. It has a lower monthly insurance premium as compared to other plan options.
Health Saving Account plan is for those people-
- Who rarely sees a doctor throughout the year.
- Who mainly go to the doctors who don’t take insurance.
- The one who wants full coverage when something major happens.
Why is the Health Saving Account Plan the best choice?
The key benefit which makes it the best choice for everyone is its low premium cost. This plan has a higher deduction which is usually the cheapest option, and one can afford easily.
Apart from this, the tax advantage of HSA is a great benefit. Each year you deposit a specific amount of money in your health saving account. That is a tax-deductible expense. Even if you don’t itemize your tax deductions, still you will receive the tax deductions.
You don’t need to spend all your money in your HSA account, unlike flexible spending accounts. The money in your account would be available for you forever for your medical expenses.
Moreover, you will get a debit card that comes with your HSA to pay for your medical expenses. You must have an open and active HSA with sufficient balance at the time of your medical treatment.
Suppose you don’t have your HSA credit card with you. Still, you can pay the bill from your credit card and get the tax advantage of your HSA. Later you can withdraw money to pay yourself back.
If you only want to contribute the money to your HSA you’ve spent on your actual medical expenses throughout the year, then you should go for ‘Filter Technique’.
In this technique, you must deposit a small amount of money in your health saving account. This will keep your account active.
Keep track of all the money you’ve spent on medical services for yourself and your family throughout the year. Pay money from any other source beside your HSA debit card.
Calculate the total amount you’ve spent and deposit that amount in your health saving account. Once you deposited the amount, a tax deduction is received for that amount.
Immediately withdraw the money and pay yourself back. This will make sure that you get the maximum deduction of your medical expenses spent that particular year.
You can use the HSA funds to pay for:
- Prescription Drugs
- Medical Expenses
- Vision Expenses
- Dental Expenses
- Feminine Hygiene Products
- Chiropractic Expenses
Final Thoughts
As we understand that choosing a health saving account is a better option as compared to other plans. It has numerous benefits, and the best part is it is the least expensive plan with low premium cost.
Besides, the money in your health saving account will be there forever for your medical expenses.
Therefore choosing a health saving account over any other plan is the beneficial choice for anyone.
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