HSA stands for Health Savings Account and is a savings account you can use to pay medical expenses with tax benefits. HSA's are more popular than ever. In fact, HSA assets reached nearly $66 billion in 2019, a 23 percent increase from the end of 2018. And the number of accounts grew 13 percent from the previous year, with over 28 million HSAs now open. Many employers that offer high-deductible health plans also offer HSAs and may even contribute to these accounts. But even if your employer does not, you can open one on your own as long as you have a qualifying health plan.
How does an HSA work?
Each year you decide how much you'd like to contribute to your Health Savings Account (assuming you don't exceed the government limits for contribution). You will receive a debit card and/or checks linked to your HSA account that you can use to pay for qualified health-related expenses such as co-pays, prescriptions, deductibles and more*. Your HSA balance rolls over from year to year, so you won't have to worry about losing your savings. Once you turn 65 and are eligible for Medicare, you can no longer contribute to your HSA but can still use the money saved in your account for out-of-pocket health expenses.
What are the benefits of an HSA?
The majority of HSA benefits are tax-related, although, by having a Health Savings Account, you can save a lot of money in the long-run. HSA contributions are either pre-taxed through an employer or tax-deductible if you open your own HSA. You also don't pay taxes on the account's growth, and if you make withdrawals for qualified expenses, you don't pay tax on those withdrawals either. In addition to the tax benefits, HSA money can be invested in mutual funds, stocks and other investment tools.
Open an HSA with Citizens Bank
If your employer does not offer an HSA, Citizens can help. Health Savings Accounts are designed to help you tackle the high costs of healthcare while saving for future medical expenses. When you open an HSA account with Citizens Bank, you get all the benefits of a traditional HSA, along with a caring team of people to work with you. Accounts can be opened without an opening deposit and include a debit card and the first 50 checks for free. There is no service charge, annual fee or per check/debit fees, and no minimum balance required. Contact us today for more information! Your health is important- make sure your finances are ready to support it.
*Note that HSA accounts normally cannot be used to pay insurance premiums.