Is an HSA Right for You?
Posted
on Friday, March 20, 2020
in
Articles
Is an HSA Right for You?
A Health Savings Account (HSA) is like a personal savings account, but it can only be used for qualified healthcare expenses. To qualify, you must be enrolled in a High-Deductible Health Plan (HDHP). These government-regulated savings accounts allow you to set aside pre-tax income to cover health care costs that aren't paid by your insurance. Eligible expenses include a wide range of medical, dental and mental health services including co-payments, medical supplies, prescriptions and even your insurance deductible. Funds can come from you, your employer, a relative or anyone else who wants to add to your HSA as long as it does not exceed the maximum contribution.
HSAs can help curb medical costs, reduce taxable income and even help you plan for retirement income. Unspent money in an HSA rolls over at the end of the year, so it's available for future health expenses. You may also save your HSA funds to cover health care expenses when you're retired, even if you're covered by Medicare at that time. Keep in mind, if you withdraw money for any purpose other than qualified expenses, you will have to pay income tax on that amount.
First National Bank created FNB U, a personalized education tool offering short interactive courses to help you take positive steps toward reaching your financial goals. Check out the Health Savings Accounts course to learn more about HSAs.