Health Savings Account Misconceptions

Health Savings Accounts (HSA) can be very confusing. Below are common questions people have regarding how the bank account and the basics of HSA plans.

What is an HSA?

A HSA (Health Savings Account) is a persoanl savings account that can allow you to pay for most Medical, Dental and Vision expenses. The money contributed in the account has tax advantages, it is not subject to federal income tax at the deposit time. Everything in your account is rolled over from year to year if not spend. 

How does an HSA compatible Health Plan work?

An HSA compatible Health Plan can be used with an HSA to obtain tax benefits. The plan typically has a higher deductible with a lower monthly premium. You would first pick your Health Plan then once accepted you would enroll yourself in a Heath Savings Account.   

Most Health Insurance Carriers suggest a bank they like to use but it makes no difference. You would receive a debit card and check book like any other bank account you have. You can pay all medical bills with the debit card, including your prescription drugs and over the counter drugs.

On HSA-Compatible Plans will my Out-of-Pocket be higher?

Typically on a PPO the Out-of-Pocket limit is between $5,000-$7,500. On most the the HSA compatible plans I see the Out-of-Pocket limit is $5,000 for the year. You will be saving in your monthly premium as well as your be putting tax free dollars into your account.

If you have any questions or would like free quotes please contact us.