Health Savings Account (HSA) Plan: Is it the Ideal Health Insurance Choice for You?

An HSA Plan is a health insurance option that combines a Health Savings Account (HSA) with a high deductible health plan. An HSA is a special tax-sheltered savings account specifically created to help pay medical expenses. It is combined with high deductible health insurance to provide low-cost health insurance coverage. Your HSA savings are used to pay your deductible, and any qualified medical expenses that are not covered by your health insurance plan.

Here are the top reasons why you should consider an HSA health insurance plan when shopping for health insurance.

The Benefits of an HSA Health Plan
Lower Costs
The HSA works in conjunction with a high deductible health plan (HDHP), which typically costs much less offers than traditional insurance, while providing access to quality health care. The high deductible insurance will cover your larger medical bills, while saving you money on insurance premiums. These savings can in turn be deposited in your HSA to cover the smaller medical bills.

Lower Taxable Income
The HSA works similarly to an Investment Retirement Account (IRA), and offers many of the same tax advantages.
Just like an IRA, all your deposits into an HSA are 100% deductible off of your gross income (before taxes), up to a specified legal limit. This lowers your taxable income, which means even more savings for you.

Tax-sheltered Growth
Your savings can grow by earning interest from the bank or from investment in the Stock Market, Mutual Funds, the money market or other financial instruments. Any such earnings on your HSA can accumulate tax-deferred. This means that, unlike a regular savings or investment account, you do not have to pay any income tax on your earnings, and if they are used for qualified medical expenses, your earnings will never be taxed.