The Health Savings Account lets people save money for healthcare costs
A health savings account (HSA) allows people to save money to pay for health and medical costs. This account is based on pre-taxation for qualified medical expenses.
Using this account, users can set aside savings for coinsurance, deductibles, copayments, and other healthcare expenses. Continue reading this news for more details.
US’ HSA available to taxpayers
HSA is available to taxpayers in the United States who are eligible for a high-deductible health plan (HDHP). By using untaxed money in a HAS, people can lower their overall health and medical care costs. That said, these funds cannot be used for premium costs.
HAS also allows users to pay for medical expenses at any time, but they can only do so if they are covered under an HDHP. In the 2022 plan year, the individual minimum deductible was $1,400, and the family minimum deductible was $2,800. In 2023, the health plan minimum deductible is $1,500 for individual coverage and $3,000 for family coverage. The increase in amounts has been due to a rise in inflation.
Users can view the plan in the marketplace to see if their health plan is eligible under HAS.
In 2023, users with self-only HDHP coverage can contribute up to $3,850 in their HAS account compared to $3,650 in 2022. Those with family HDHP coverage can contribute up to $7,750 in 2023 compared to $7,300 in 2022.
These funds roll over year-on-year if left unused. A health savings account also earns other earnings, such as interest which isn’t taxable. Some health insurers also offer HSAs for HDHPs that insurance holders can check online. Alternatively, users can open their accounts through financial institutions like banks.
High-deductible health plans
High-deductible health plans allow users to manage medical expenses by opening a health savings account. Enrolling with HDHP allows users to pay a lower premium per month with a higher deductible. It means the plan holder pays for health care services and items more before their insurance company pays.
The lower premium is a plus point for those who need many services and healthcare items as they use tax-free money, which results in savings, and they can use reserves to pay for expenses later.