You have multiple choices while buying an insurance plan. But to find out how insurance plans are different from each other and what is best suitable for you requires a lot of research. While selecting a health care plan you need to look for a plan that saves your money, has lesser deductibles and gives you some freedom and control of your health care expenses. HSA insurance is one such system. We are sure that you are thinking what is HSA insurance and what does HSA insurance mean? It is an easy, flexible and smart tool for buyers like you to save money incurred on health expenses for you and your family. Come with us to explore more;
What is HSA Insurance?
“Health Savings Account,” or HSA is just like a personal savings bank account. Nonetheless, the money deposited in that account is used for health care expenses.
What is Health Service Account?
Health Service Account is a great way to save money and pay for your medical expenses. Others such as your relative(s) or employer can also contribute towards this account to add value to it. However, you are the owner of HSA account and have complete control over this account and your insurance company or employers can’t own or operate that account.
Eligibility for HSA Insurance
To be eligible for HSA health insurance, you must be enrolled in a special type of insurance plan called “High Deductible Health Plan” or HDHP. This is a plan with higher deductibles, but contrary to plans with less deductibles, monthly premium is very less, that is why, this is very lucrative for people who want to save money on health care expenses or are going through some sort of financial crunch. HDHP covers serious injuries and illness while annual visits, screenings and immunizations are not covered.
According to the guidelines devised by American Government you can open an HSA insurance account if you are not enrolled in any other non-HDHP plan, not registered in Medicare, not declared a dependent in someone else’s tax returns and are covered under HDHP on the first day of a month.
Advantages of HSA Insurance
HSA insurance is an excellent way to give you control over your health care expenses. Some of its benefits include;
Tax Free: The biggest advantage of health savings account is that its earnings and savings are absolutely tax-free. Unless and until the money goes towards payment of your medical expenses, tax is exempted.
Roll Over: Similar to saving account the left over money is rolled over for the next year. There is no fear of losing unspent money.
Manageable: Since, you own your health savings account, it is transferable even if you switch jobs or relocate or retire. Money in your account continues growing.
Expedient: Since, majority of HSAs issue debit card so it allows you to pay for your medical visits, prescription, hospitalization and other health care bills right away. You can also access an ATM to get cash.
Not Like Your Traditional Insurance: Compared with HSA, traditional health insurance policies look like purchasing lottery tickets or praying for good health. Nonetheless, if combined with a right insurance plan, you can use the money saved from lower premium in stocking up in HSA.
Building Up Interest: Last but not the least, your unused HSA health insurance money earns interest, which is just as good as money—and get this, earnings are still tax-free. Most banks will even let you invest a portion of your HSA dollars in stocks, bonds, and mutual funds for even bigger returns! In fact, you won’t find a savings vehicle anywhere that gives you a triple tax advantage, easy access to your money, and the kind of investment options you can get from an HSA account.
Disadvantages of HSA Health Insurance
There are some disadvantages of HSA as well and those who don’t know what is a health savings account is are not aware of it. Perfect it may seem but HSA health insurance comes with its set of flaws as well. Such as; higher deductibles, penalties, pressure to save, record keeping of all the records and receipts as a proof that withdrawals were saved on medical expenses and unexpected medical expenditure as sickness can be unexpected or unpredicted allowing no time to save money for health care.