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If you are browsing various healthcare coverage plans trying to find the best option for you, you will probably see some terms that you aren’t too familiar with. To decide which plan best suits your lifestyle and needs though, it’s essential to understand what each plan entails. One term you may be seeing throughout healthcare and insurance sites is “health savings account”, or “HSA.” So, what is a health savings account? And what are the benefits associated with an HSA?
An HSA is a savings account with funds allocated specifically for healthcare expenses and eligible for certain tax advantages. HSA accounts are only available for high-deductible health insurance plans, including O’NA HealthCare™ High Deductible Healthcare Plans. If you’re wondering whether such an account would be right for you and your family, consider the following health savings account benefits.
Funds that you deposit into your HSA are deductible on your federal income taxes. Nothing is better than getting a bigger refund or paying a smaller balance to the IRS, and it’s ideal when this benefit accompanies the security offered by an HSA. Unlike other specialized savings accounts that impose tax penalties for withdrawals, taking funds out of your HSA isn’t taxed either- so long as the withdrawal is used to cover eligible medical expenses. Medical expenses are an inevitability, so stowing away funds in an HSA is a great way to minimize your tax bill while also planning for your healthcare.
The interest rates on a health savings account vary based on the institution you open it at and the amount you initially deposit. Some accounts range in interest from .1 percent APY to .45% APY. Traditional savings accounts’ interest earnings are subject to taxation if they surpass $10 a year, but HSA interest earnings are not. Like your initial deposit, the sum that you earn in interest will remain untaxed by the IRS. This is great news if you can deposit a substantial amount and find a bank that offers a high-interest rate on your funds.
Many people hope that they can survive without seeing a doctor and avoid healthcare emergencies, but there are a million ways that an unexpected medical expense can happen. Car accidents, physical injuries, and serious diagnoses don’t discriminate. They can happen to anybody, and if you haven’t planned for such a possibility, such an event can be financially devastating. Some of the expenses you may incur if you haven’t properly planned include the following:
A health savings account makes it simple to prevent the additional expenses associated with medical emergencies.
When people ask “what is a health savings account?” they often have a number of questions beyond a simple definition. How long does it last? How is it taxed? When can I use it? An important feature of an HSA is the fact that you can keep funds in the account for as long as you’d like without penalty.
You do not need to have a minimum quota of activity in order to maintain the account, so you don’t need to use or withdraw the funds within a certain time period. This is good since medical emergencies cannot be planned—so you never know when you will need to use funds. It may be six months after establishing your account, but it may also be six years.
Many HSA account holders may worry about the timeframe for medical expenses incurred. Some policies only cover expenses that occur a certain time period after establishment or enrollment, but with an HSA, any expenses that are incurred after establishment of your account are eligible for coverage.
This means that even if you have not claimed reimbursement for an expense a year after it occurred, so long as it happened after you established and funded your HSA, it may be eligible for coverage. There is no probationary period or trial that delays potential reimbursement from your account. This makes it simple to deal with any healthcare expenses that happen after the establishment of your account.
With traditional insurance, one of the most stressful factors is the uncertainty of insurance coverage. Your policy could change at any moment, your premiums could go up, or it could be discontinued. Luckily, O’NA HealthCare™ offers the benefits of an HSA without the constant worry that your costs will go up. Our premiums haven’t changed since 2014!
One of the best advantages of an HSA is the fact that it is not affected by changes like this. So long as your initial coverage is an eligible high deductible plan, any future changes in your coverage will not threaten your HSA savings. If you incur a medical expense while covered by a plan that would be HSA ineligible, it is still eligible for coverage because you established your HSA with an eligible plan.
Lastly, individuals who establish an HSA will be pleased to learn that dental and vision expenses are also eligible for reimbursement through their HSA. If you need to get new glasses or have a cavity filled, routine healthcare costs like these may not be covered by traditional insurance, but you can fund them through your HSA. Many health insurance policies do not extend vision and dental coverage, so an HSA provides a great way to ensure that these healthcare needs are met without the burden of paying them out of pocket.
With O’NA HealthCare™, you don’t have to worry about these expenses ever. Along with an HSA, you also get coverage for holistic dental care. This includes initial and routine checkups, cleanings, comprehensive dental examinations, dental trans-illumination, thermography, panoramic x-ray, and more!
So, these health savings account benefits may make it the right option for you. With an O’NA HealthCare™ High Deductible Healthcare Plan, you can get a Health Savings Account through HealthEquity. With O’NA, setting up your HSA takes less than 5 seconds. All you have to do is opt-in during enrollment and the account will be automatically created. This way, you get all the benefits of an HSA, along with the unique member benefits O’NA HealthCare™ offers. Unlike traditional insurance companies, O’NA truly cares about your health and wellness. Learn more about O’NA HealthCare™ and the all-inclusive benefits we offer today!