Health Savings Account Blog

An HSA is a tax-deductible savings account that lets individuals set aside money to cover the cost of their healthcare. Like with an IRA, individuals can invest the funds from their Health Savings Accounts into high interest rate mutual funds, stocks, money markets, and more. The growth on those investments is tax-free and the money can be used to pay for qualifying medical expenses, including dental expenses, mental therapy, physical therapy, alternative treatments (such as acupuncture), transportation and lodging related to medical expenses, and even non-prescription medications.

We're finding an increase in interest for our HSA plans. As Americans are losing their jobs, they are recognizing that they still need to find a way to afford healthcare for themselves and their families. An HSA is a great addition to a high-deductible insurance plan, like a COBRA plan, because it gives individuals a tax deduction when they set aside money for their healthcare. The money grows tax-free in the savings account. Then, if they need the money for something else down the road that is not related to their healthcare, they can still have access to that money.

Moreover, according to a recent survey by Information Strategies, Inc., 50% of individuals on COBRA that also have an HSA policy are using their HSA funds to pay for their high COBRA premiums each month. Only 51 percent of survey respondents said they have actively investigated Health Savings Accounts as an alternative healthcare benefit. We are hoping that more laid-off workers take a look at HSA plans as a way to cut their health insurance costs. Health Savings Accounts not only benefit individuals, but they can also be used to cover healthcare costs for an entire family.