Significant Advantages of HSA play a Vital Role in Planning Healthcare Strategy

High Deductible Health Plans

Health Savings Account is a tax-advantaged account available since 2004, which is designed to help people having High Deductible Health Plans to pay out-of-pocket medical expenses. With the consistent discussion of the HSA benefits among the journalists and politicians, there has been skyrocketing participation in these accounts by the people all across the country. People were quick to open this account so that they can make pre-tax contributions in their HSAs. The increased people’s participation in this account can be understood with the fact that participation surged from 3.2 million to 20.2 million between 2006 and 2016, according to America’s Health Insurance Plans. HSA is a powerful piece of a well-designed health care strategy.

To qualify for this account, you should have an HSA-eligible health insurance plan with a deductible of at least $1,350 for individual coverage or $2,700 for family coverage, irrespective of whether you obtain insurance through your employer or on your own. In an HSA account, you can contribute up to $3,500 in 2019 if you have individual coverage and up to $7,000 if you have family coverage, along with an additional $1,000 if you are 55 years of age or older.

With more and more people learning about the benefits of the HSAs, its popularity is sure to increase, and people’s participation is also expected to increase in the coming years. Some of the vital benefits of this HSA are discussed below:

Triple Tax Benefits

The HSA has a triple tax benefit, people contributions in this account are tax-deductible, or if contributions are made by the employer then the amount is pretax, the money in the account grows tax-deferred, and people can use the money tax-free to pay co-payments, deductibles, out-of-pocket dental and vision costs, prescription drug costs, along with other eligible expenses. The account has triple tax benefits, as contributions are pretax, interest earned is tax-free, and withdrawals for qualified medical expenses are tax-free.

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You always have this money

Unlike the flexible spending accounts, people’s contribution is the HSA roll over from year to year, and they can use the money saved in this account for the rest of their lives to pay for any medical expenses. Furthermore, there are no age criteria for people having this account to use the money saved in this account.

Invest the Saved Money

People saving money in this account are free to use the money as per their will. Though the majority of people use the saved money to pay for medical expenses, they are also free to invest their savings in some of the investment vehicles like mutual funds, etc. People can build-up their saved money with a proper investment strategy to use the money during retirement. People are allowed to save their receipts from eligible medical expenses to, later on, reimburse tax-free.

Easy to operate Account

Using the money saved in the HSA account is not at all complicated and doesn’t involve piles of forms and waiting for days for reimbursement. People signing up with Benefit Resource receive a Beniversal Prepaid Mastercard, which is used just like a regular credit or debit card to pay for medical products and services. Besides, people also gain access to online bill payment and transfer of money, making it easy to reimburse themselves or move funds from personal accounts to their HSA.


The money saved in the HSA remains available to people, and they can use the money from this account to pay for any qualified medical expenses in the future, even if they join another company, change their health insurance plans, or retire from their job.

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HSA doesn’t come with required minimum distributions

The money saved in a traditional IRA, or any such type of account can’t sit idle for indefinitely, and people after turning more than 70 need to mandatory withdraw annually, which is known as required minimum distributions. This way people lose out on the tax-advantaged growth, but with HSA there are not any such required minimum distributions. So, if people don’t need money every year in retirement, then they can leave their balance to grow for larger expenses in the future.

By properly utilizing the HSA power, people will be able to save money with a low premium high-deductible health plan, build-up a tax-free fund to use for medical expenses, save taxes with a coordinating deduction, and above all can have complete control of their healthcare strategy.

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