While it’s great to have health insurance, many plans have high deductibles. If a medical emergency arises, your out of pocket expenses can add up quick. A good option for offsetting some of these costs is a Health Savings Account.
A Health Savings Account, often referred to as an HSA, is a tax-advantaged savings account that can help you pay for medical expenses tax free now and in the future. To qualify for an HSA, you just have to be currently enrolled in a high-deductible health insurance plan. Each year, these amounts are determined by the IRS. Many employers offer HSAs as an add on option and some even contribute. If you have a high-deductible health insurance plan, this is something you will want to check with your employer.
Tax advantages are the biggest benefit of an HSA. If your HSA is through your employer, they are usually pre-tax. If you open your own, they are usually tax deductible. HSAs can be confused with Flexible Spending Accounts. While both help offset the cost of your health insurance, HSAs are different from a because you can rollover your balance each year. You never have to worry about losing what is in your account.
If you qualify for an HSA, but your employer doesn’t offer this option, check out Sikorsky Credit Union’s Health Savings Account. It earns 1.00% APY* and there are no service fees and no minimum balance required.** Learn more.
Always check with your tax advisor if you have questions.
*APY = Annual Percentage Yield. Fees could reduce earnings.
**No minimum deposit to open account.
As we approach year-end, many companies have their health insurance open enrollment period. This year, more than ever, our health has been top of mind. This makes it even more important to look at what is included in your health insurance plan.