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January 06, 2012
A Health Savings Account Plan Can Help With Unemployment
With the cost of health insurance rising much faster than income, many people are not receiving adequate medical care. The number of people who do not have health insurance grows as layoffs continue. One big benefit of having a Health Savings Account (HSA) is that you own it completely. If you leave your job, all of the funds are yours to keep and you can use that money to pay for health care when you're between jobs.
When you contribute to a HSA, you can take a tax deduction to keep your federal, and almost always state, income taxes low. You don’t even have to itemize deductions to claim your HSA contribution as a deduction.
Then If you need to withdraw HSA money to pay for qualified health care, you aren't taxed on the money you withdraw either.
Unlike flexible spending accounts that can also be used to fund health care, your HSA funds are not lost at the end of the year if you haven't spent the money on health care. The balance just continues to grow with tax-free earnings year after year. That's right, I did say the earnings are not taxed even though you deposited pre-tax dollars.
You have control of your Health Savings Account. Your employer may also contribute to it, but you are the account owner. You take your HSA with you if you change jobs, are unemployed, or retire. You also have a choice in how to invest HSA dollars. The options range from interest-bearing accounts to mutual fund options. If this sounds like something you could use, take a look at the HSA plans that are available in your state with our online instant quotes.
Posted by Wiley Long at January 6, 2012 06:18 AM