Healthcare Savings Accounts

I don’t think there is a financial advisor on the planet that will tell you NOT to have some sort of savings.  It’s a part of life we all strive for, to have enough money for a rainy day, an emergency, a vacation.  When it comes to this open enrollment season, should having a healthcare savings account be a priority for you and your family?

A healthcare savings account (HSA) is a type of savings account that lets you set aside money on a pre-tax basis to pay for qualified medical expenses. By using untaxed dollars in a Health Savings Account (HSA) to pay for deductibles, copayments, coinsurance, and some other expenses, you may be able to lower your overall health care costs. HSA funds generally may not be used to pay premiums. (

Before we go any farther into this blog post, I want to manage your expectations.  The healthcare savings accounts are only found in High Deductible Health Plans (HDHP). These are generally health plans (including a Marketplace plan) that only cover preventive services before the deductible. You can use the funds in an HSA any time, but you can only contribute if you have a qualified HDHP. Your deductible is the amount you pay for covered services before your insurance coverage starts. In 2020 and 2021, the minimum deductible for an HDHP is $1,400 for individual coverage and $2,800 for family coverage.

Now that expectations have been managed, there are some benefits to having a healthcare savings account:

  • The funds in your HSA grow tax-free
  • You don’t pay taxes on the money you withdraw to pay for medical expenses
  • Your contributions stay in your HSA until you use them

Because the funds in your HSA grow tax-free, the contributions made are potentially a workaround for taxpayers to deduct medical expenses. Medical expenses can only be deducted if you itemize your expenses on IRS Form Schedule A, and those medical expenses must exceed 10 percent of your adjusted gross income (AGI) in order to be deductible. The HSA lets you deduct at least part of your medical expenses through your contributions…even if you don’t use the funds for medical expenses immediately.

As you know, there are different strokes for different folks and that’s why I enjoy the insurance conversation.  Educating people about their choices (pre and post decision), is something I love to do. That said, I am taking appointments to converse with people, just like you, to help them make the best healthcare decisions possible.  There is so much involved in the healthcare savings account decision that one blog post couldn’t possibly do it justice. Depending on your needs, the solutions could go in a variety of directions.

Book some time on my schedule TODAY, to learn more about healthcare savings accounts (HSA’s), whether you qualify, and/or the difference between them and flexible spending accounts (FSA’s).  More importantly, book some time to learn about my health insurance consulting services that provide amazing value AFTER the healthcare decisions have been made.