This article is over a year old, but none of the reasons that this person loves their HSA has changed. http://www.financialfinesse.com/blog/2011/07/why-i-love-my-hsa-and-you-should-too/
When you hear high deductible health plan, you may shudder at the thought of paying $2,000 before your company kicks in health insurance coverage. You are not alone in thinking this, but fear not. When you break down how an HSA works, you are sure to love how it works.
Many companies use the $2K (or whatever the savings amount is) to put into a health savings account (HSA) for each of employee that you can then use to pay that $2K deductible. As a result, you don’t really pay anything out of pocket.
Even if your company does not contribute to your account, an HSA can change your whole view on health spending, saving you money in the long run. Normally, you just go to the doctor and don’t think about costs since someone else (the insurance company directly and your employer indirectly through higher premiums) is paying. According to the article, the author notes that his spending habits have changed. “Instead, when the dentists asks when was the last time I had my x-rays done, I make sure I know the answer before paying for x-rays I don’t need. I only update my contact lens prescriptions when they expire or need updating, not every time I happen to be in the optometrist office for a routine checkup (it cost extra for the prescription).” I didn’t use to do any of these things before I had an HSA.”
Here is where Hiveaway can help even further. When most people think of qualified expenses, they think, eye care and dental care. There are so many more options for you to spend your tax free savings on and Hiveaway has broken it down into simplified categories. Did you know that you can buy a breast pump with your HSA? Breastpumps are not cheap! How about acupuncture? With more and more people using alternative medicine, why not use your pre-tax dollars for acupuncture. And of course, our providers are waiting to send you an ad or even a promotion through our platform so your can easily find the best providers for the best price in your area.
The article goes on to point out that you pay no taxes on the money, you get to keep whatever you don’t spend and once you hit age 65, you can spend the money on retirement without penalty and use it tax free for medical expenses “(which Fidelity estimates will be about $230k over the remaining lifetime of a 65-yr old couple without retiree health insurance), or just let it continue to grow tax-deferred.”
Lastly, the author loves that since the limit is $3,050 per year for a single person, he can have the deposits deducted from his paycheck and does not have to pay the 7.5% payroll tax on it. “Not even 401(k) contributions let you do that. When you consider that HSAs offer your both pre-tax contributions AND the potential for tax-free withdrawals, there’s an argument for funding it even ahead of your 401(k) (after you’ve maxed the match) or IRA.”
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