What is a health savings account? Anyone that is new to the health insurance search probably has no idea. If you are in the market for health coverage this is a plan that might work for you. It is a sort of combination between health insurance and a savings account. It is really nice because it helps you to get more affordable coverage for you and your family. To qualify for a HSA you first have to get a certain health plan and you can get it started.
The basic info on this HSA is that not just anyone can get it. The only qualification though is getting a high deductible insurance plan. It has to be so high that you would have to pay more than $1,100 for your deductible in an individual plan. If you have priced out insurance deductibles you know that is pretty high. If you don’t get it, it means that you have to cover the cost of your own care up to that amount before your insurance company will contribute anything. The lovely thing about this plan is that you will have a lower monthly premium. So the monthly payment won’t kill you.
The truly best thing about this HSA is the mere fact that if you have money directly deposited into it from your wages, they won’t take taxes out of that part of your check. Taxes take a big bite out of your money and being able to save some money that way is awesome. While it sits in the account it also will earn interest. You can use other sources of money to put in there of course, as well. You can put whatever loose money that you have in there. If you want , you can even use some of your IRA funds. Your probably wondering what will happen to the money if it is never needed for your health coverage. It does continue to earn interest the whole time it is in there. And it does roll over each year. If you never need it or if you only need part of it, the remainder can be taken out by you when you turn 65. It is then your play money and still untaxed.