What is a Health Savings Account?

Video Transcript:

Have you noticed healthcare costs going up? That may be why Health Savings Accounts or HSAs are more popular than ever. You can use an HSA with a qualified high deductible health plan to pay for eligible out-of-pocket medical expenses. This may include medical bills, dental and vision needs, and everyday health costs, like contact lens solution, sunscreen, and band-aids.

With an HSA, there is no time limit to request reimbursement. Once you've established your HSA, you can still pay out-of-pocket for eligible expenses and reimburse yourself from your HSA later. There are several types of reimbursement accounts, so what makes HSAs unique? You own the account, so you keep it even if you change jobs, switch health plans, or retire. You choose how much to contribute and when to contribute up to a yearly maximum. Your balance can roll over year after year, which means you don't have to worry about the use or lose rule. This account can serve as a useful tool for retirement planning.

An HSA can also offer you three tax advantages including pre-tax contributions through your employer's Section 125 plan, tax-free funds for eligible medical purchases, and tax-free earnings on investments. Once you reach age 65, you can withdraw your HSA funds for non-medical purposes as needed in retirement. You will only need to pay income tax on the withdrawals.

Prepare for your financial independence and save more on medical expenses by signing up for an HSA today.

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