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October 27, 2011
The New Health Savings Account Strategy
Consumers continue to make the most of Health Savings Account (HSA) Plans. One new trend is to increase the deductible on the HSA-qualified health plan as the HSA balance grows. This often results in lowering the monthly premium, which in turn increases the potential to save money. In case the Health Savings Account owner does need to meet the HSA plan’s deductible, the Health Savings Account balance can cover the gap until the insurance company starts to pay for medical claims.
Switching health insurance plans in order to lower premium costs as the HSA balance grows works better when the high-deductible health plan and the HSA are coming from different companies.
If the insurance company doubles as the HSA administrator, changing the health plan may mean changing the HSA, too.
The ability to grow a Health Savings Account balance is simply not possible with flexible savings accounts. Those funds revert back to employers if not used by employees at the end of the year. That’s one of the reasons that the HSA option has become so popular. HSA money rolls over every year to keep on growing with tax-free earnings, and it always remains the property of the employee even when an employer make contributions.
How you invest HSA funds is up to you even when your employer contributes to your HSA. As the demand for HSA options has grown, more financial institutions have jumped on board to add greater choice and convenience. You can now invest HSA funds in bonds, mutual funds, savings accounts that pay interest or stocks. Withdrawals can sometimes be made by check or with cards, like debit cards. More information about HSA benefits and perks can be found on our website.
Posted by Wiley Long at October 27, 2011 01:02 AM