Who is eligible for an HSA?

An HSA, or health savings account, is a special savings account that can help you save pre-tax dollars to pay for certain qualified medical expenses associated with your individual or family health insurance plan. Your employer can even contribute funds to your group health insurance HSA, providing a valuable source of funds beyond your own contributions and any interest your HSA account earns.

Funds placed in an HSA can be used for qualified medical expenses, including:

• Prescription medications or over-the-counter medications for which you hold a prescription
• Routine exams
• Specialist care
• Laboratory work and X-rays
• Dental care
• Treatment associated with drug and alcohol addiction
• Some durable medical equipment

Although an HSA can certainly make your individual health insurance plan more affordable, it may not be an option for all types of health insurance. Health insurance plans must be qualified high-deductible plans in order to have associated HSAs. You will also need to qualify, which means that you must not be over the age of 65 or entitled to Medicare or be able to be claimed as a dependent on someone else’s taxes.

When you’re shopping for cheap health insurance plans, shopping specifically for one with a high deductible that is also HSA-qualified may ultimately prove to be the most affordable choice for you. You’ll be able to set aside funds specifically for your medical care in a tax-free account and use it only when you need it, while saving money on your monthly premium by using a high deductible health insurance plan.

An HSA may not be the right choice for everyone, however. Your budget, type of insurance plan, and health care needs may all play a role in your final decision. Carefully consider your medical history in recent years, your projected medical needs, and how much you can reasonably budget towards your total health care budget before committing to an insurance plan and health savings plan.

Source: Los Angeles Health Care

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