It’s a new year and new financial decisions to be made. If you’ve come across the term HSA during an annual healthcare enrollment period, you may have been confused about how you might best use this type of account, or if it’s worth opting into at all.
HSAs are tax-advantaged savings accounts that allow individuals to earmark money for medical expenses, including deductibles, medical services, and prescription medications.
Why set up an HSA? Two reasons are to have a more hands-on approach to healthcare choices and to take advantage of the tax implications. The Internal Revenue Service (IRS) provides further information about eligibility requirements, which, for instance, may exclude those enrolled in Medicare, so consider consulting a tax advisor.
What Medical Expenses Qualify Under an HSA? HSAs can be used for various medical expenses, including deductibles, medical services, prescription medications, over-the-counter items, and long-term care expenses. Common exclusions include items not prescribed, such as fitness equipment, vitamins, or cosmetic procedures; however, it is your responsibility to understand your specific plan guidelines. If in doubt, consult with your HSA provider or tax advisor.
How to Set Up an HSA? If you’re eligible and enrolled in a qualified HDHP, you can open an HSA much like you would a traditional bank account. Your financial institution or employer can guide you through the account-opening process, which may include requirements such as proper identification and a signed HSA eligibility form from your insurance provider.
The full article with more detailed information and quotes is here.
Your financial journey starts with SouthEast Bank.
Olivia Johnson is marketing strategist for Southeast Bank.
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