Is an HSA healthcare plan right for you?

Updated: Oct. 20, 2020 at 3:48 PM CDT
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BATON ROUGE, La. (WAFB) - In many cases, a health savings account (HSA)and a high deductible healthcare plan go hand-in-hand. That HSA is meant to exist as a nest egg for healthcare expenses.

It’s an account you can start at any age before retirement.

“I find that HSAs are very powerful solutions for people in their forties and fifties especially,” said Michael Bertaut, a Healthcare Economist and Exchange Coordinator for Blue Cross Blue Shield of Louisiana.

Bertaut says while you may be able to build up that nest egg over a longer period of time starting in your twenties, still don’t shy away from the idea in your midlife either.

Typically people in their forties and fifties make more money than they did in their twenties,” he said. “And the money you contribute to an HSA is pre-tax dollars.”

As you get older, you may have more disposable income to put into your HSA, so it may still be an option for your situation. However, no matter your age, those pre-tax dollars follow you wherever you go.

“And the money is always yours, even if you leave your employer, change jobs, roll into a different plan,” said the healthcare economist.

The idea is you save money by paying low premiums for a high deductible healthcare plan. Then, you put that saved money into your HSA to pay for medications, appointments, and emergencies.

“The money is legal to use for all of your qualified health expenses,” said Bertaut.

That’s because with an IRS approved high deductible plan paired with an HSA, you pay retail price for your healthcare services. Your HSA money is meant to help offset those costs.

However, if you have a low income or many health issues, an HSA plan may not be the right option.

“People who have a lot of ongoing health conditions where they know will be spending a lot of money over an extended period of time, need to shop their options.”

Bertaut says to reach out to your workplace’s HR department to see if they can work with you and your healthcare options. And, of course, ask your accountant for help on your money moves.

At the end of the day, it’s a balancing act. What is your expected spending versus how much can you protect in the HSA?

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