Health care costs continue to change and can be a significant financial factor later in life. You can help manage your health care costs when you participate in a health savings account (HSA) in conjunction with a qualified high-deductible health care plan (HDHP).
What if you could better manage healthcare related expenses?
What is an HSA?
A health savings account or HSA can be established when you’re enrolled in an HDHP. An HSA allows you to spend pre-tax dollars on qualified health care costs that insurance doesn’t cover. Think of an HSA as a financial tool to help you pay for medical expenses with pre-tax dollars.
An HSA can also help you save for the long term because when HSA funds are not spent, they roll over to the next year and the amount earns tax-free interest (tax free gains). By opening an HSA, you can direct pre-tax money into an account that’s designed to help you pay for qualified medical expenses before you’ve met your deductible, and help you save for medical expenses over the long-term. An HSA is “portable.” It stays with you if you change employers or leave the work force.
How do you use an HSA?
Your HSA requires a minimum balance of $100 to open an account, and as soon as your account is open, you can spend the money on qualified medical expenses. Another great benefit of the HSA is that there is no age requirement to take out or use your HSA funds.
At Ergo Bank your HSA includes a debit card and checks as forms of payment so you can use it for qualified medical expense transactions in-store or online, at doctor and medical offices, and with medical merchants.
Tax-advantaged accounts such as an HSA can be used to pay for qualified medical expenses without federal tax liability. Visit the IRS site to review qualified expenses which include medical expenses such as prescriptions, vision, and dental care.
Benefits when your HSA is with Ergo Bank
- Unlimited check writing and no per check charges
- No monthly service charges
- Interest paid on tiered balances
Do you want to use an HSA as a long-term care investment or plan?
You can think of an HSA as a long-term care fund that you can establish and contribute to until you enroll in Medicare. Once you enroll in Medicare, you need to stop contributing; however, the money continues to grow throughout your retirement.
The reason you might consider an HSA for long-term care is because Medicare doesn’t cover long-term care, and the eligibility for Medicaid is often met when one is severely financially distressed and financially exhausted. Some HSA funds and situations qualify to pay Medicare premiums and can even be considered as an investment option for long-term care bills needed later in life. Don’t worry, if you don’t need or use your HSA funds, like a retirement account, you can pass it on to your beneficiary.
If you decide to establish and use an HSA as a retirement investment vehicle, there is no age requirement and no income limit; however, you still need health insurance coverage under an HSA-qualified HDHP and you cannot be claimed as a dependent.
Do you want to open an HSA with Ergo today?
Your HSA is a standalone account that you can take anywhere. If your employer offers HDHP but no HSA, you can establish one.
If you want to open an HSA with Ergo Bank, you can call us at (920) 398-2336 to get started. We will help you identify qualifications and then walk you through the process to enroll and open an account.
Before opening an HSA account, check with your tax advisor.