10 Health Savings Account HSA Facts You Need to Know
Despite changes from health reform, 45 percent of people in the United States still get their health benefits from their employer, according to a recent Gallup Poll. And fall is the busiest time of year for open enrollment—the time of year when employees get to enroll in benefits that their employers are offering or to make changes to their existing benefit choices. As employers of all sizes are shifting to consumer-directed health plans or account-based plans high-deductible health plans that are paired with a spending account, it’s important that consumers understand the basics of how spending accounts work.
As one of the Top 10 spending account administrators in the country, SelectAccount has been administering spending accounts—including the health savings account HSA—for more than 20 years. To help consumers as they consider the benefits being offered by their employer, SelectAccount offers the following facts about HSAs.
What every health care consumer needs to know about HSAs:
1. The HSA gives you a triple tax benefit:
First, HSA contributions reduce the account holder’s taxable income
Second, money in the HSA earns interest tax-free
Third, withdrawals are tax-free when used for eligible medical expenses
2. The account holder decides when and how to spend the HSA dollars.
3. The account holder can use the HSA to pay for eligible expenses that aren’t covered by their health plan – like deductibles, coinsurance, dental care, orthodontia, and vision care.
4. There is no “use it or lose it.” This means that money not used in one year rolls over and is added to the HSA balance for the next year.
5. The individual and/or their employer can contribute to the HSA in a given year.
6. The HSA works with a high-deductible health plan, whether you purchase health insurance on your own or if you receive coverage through your employer.
7. The account holder has fast, easy access to their HSA dollars, especially if they have access to an HSA debit card or online reimbursements with direct deposit.
8. Account holders can manage their account dollars, as they wish. SelectAccount offers a dedicated Online Member Service Center that allows members to manage their account online, anytime—even from their mobile device.
9. A portion of unused HSA dollars can be invested in a variety of stocks, bonds, and mutual funds (feature not available from all account administrators).
10. The money in the HSA belongs to the individual, even if they change jobs or retire.