Health Savings Account Blog

A Health Savings Account is kind of like a 401k for your health. Just like a 401k, you can deduct a portion of your paycheck tax-free and put it into a Health Savings Account. Deducting a small percentage of your paycheck without taking taxes out will not result in much difference in your take-home pay. Therefore, you can accumulate a pretty nice savings for health expenses this way.

2. Health Savings Accounts Allow You To Budget

When it comes to health care, most people do not budget anything for it. Since health care is such a hard thing to budget for, most people do not account for it until it happens. With a health savings account, you can put away enough money to provide the medical expenses you need. Budgeting a small portion of your income to this makes sense and it will help you avoid large medical bills that you cannot pay.

3. Employer Match to you Health Savings Account

Depending on your employer, they might make a contribution to your Health Savings Account for you. This works much the same way as an employer-match program on your 401k. You contribute so much and your employer will match up to a certain percentage to put in your Health Savings Account. This is a great way to build up funds without investing that much of your own money.

4. Early Health Savings Account Distribution Penalties

A Health Savings Account is designed to save for health expenses only. If you take any of the money out for other reasons before you are 65, you will be penalized for it. In fact, you will have to pay taxes on the money and get hit with a 10% early distribution fee. This means you should stay away from this as a form of saving money for anything except medical fees.

5. Health Savings Accounts Give You More Control

When you have money set aside for your health care expenses, you are automatically given more control over the situation. Many people just go wherever they can go that is the cheapest because they have no money reserved for health care. When you put back enough money in your Health Savings Account, you can choose where you want to go based on treatment and service instead of money only. Getting the treatment you deserve should never be about money and a Health Savings Account can make that possible.

6. Anyone Can Get a Health Savings Account

Contrary to what many people might think, you don't have to be at an employer that offers Health Savings Accounts to get one. You can get one from a bank or any other financial institution. You can still contribute tax free and get all the benefits of a Health Savings Account regardless.