Health Care -Health Savings Accounts
by JJ Childers
This week's Monday Morning Mentor Minute
Welcome to another Monday Morning Mentor, I’m JJ Childers. The past few weeks we’ve been talking about the rising costs of healthcare and some solutions how to afford ordinary medical expenses as well as the catastrophic illness or injury. Today I’m going to be discussing health savings accounts, also called an HSA.
HSAs enable you to pay for current health expenses and save for future qualified medical and retiree health expenses on a tax-free basis. With an HSA, you deposit money into a savings account which is then used to pay for any out-of-pocket medical expenses. The money deposited into your account, as well as the earnings, is tax-deferred. The money can then be withdrawn to cover qualified medical expenses tax-free. Unused balances roll over from year to year.
To qualify for an HSA account you simply must be covered by a High Deductible Health Plan (HDHP). An HDHP generally costs less than what traditional health care coverage costs.
Starting the beginning of each year, you pay for all medical expenses out of your HSA until you have met the deductible for your HDHP, at which point that policy would cover all other medical expenses for the rest of the year.
