Education

How to Offset Rising Medical Costs

health savings account

Want o learn how to offset rising medical costs? Over the years medical costs have risen tremendously, HSAs were designed to help offset rising medical costs. Just to refresh, employees with high deductible health insurance plans can open an HSA. With open enrollment right around the corner here are some facts you need to know about HSAs.

You cannot use an HSA when using an FSA.

You can be covered by an HSA only when you are not covered by any other health coverage (FSA). In order to enroll in an HSA, you must be enrolled in a high-deductible health plan, you have no other health coverage, you are not enrolled in Medicare, and you are not claimed as a dependent on someone else’s taxes.

An HSA can grow each year.

Your balance in an HSA can continue to grow each year, unlike an FSA which a “use it or lose it” kind of plan. This can help you plan accordingly for those rising medical costs.

You own the HSA.

You own the contributions even if you change health plans, leave your employer or retire. It’s yours to take it with you wherever life takes you.

Using un-taxed dollars.

The money you are putting into your HSA is not taxed. Plus, you can earn tax-free interest on your balances. Again earning “free” money to assist with rising medical costs.

HSAs can provide retirement benefits.

Once 65, the money you withdraw from an HSA for eligible medical expenses continues to come out untaxed. However, if you don’t have medical expenses that exhaust your HSA funds you can also make distributions on non-medical expenses. In this instance, the account will act as a traditional IRA or retirement account.

Does your employer offer an HSA? Contact your HR department to learn more about your employee benefits.

Want to learn more? Head on over to https://www.flex-admin.com/hsa/