Why do you need a Health Saving Account?
Medical expenses are pretty high in today's time. If you don't happen to have medical insurance you will surely land up paying more through high taxes. And that is why the concept of the Health Savings Account had gained ground in our lives. A Health Saving Account is actually high deductible health insurance combined with a savings account that is tax-favored. For each family, there is only one calendar-deductible and you can also opt for a plan that pays 100% of the covered expenses?
Why have an HSA?
The best part of having a Health Savings An account is that you pay for insurance which costs less than other health insurance plans available in the market. It is useful while paying medical and Dentist bills. The deductible for your health insurance can be paid with the money present in the savings account. After the full amount of the deductible is paid you start receiving the health insurance company starts paying.
The money left in the savings accounts now starts earning interests which you can keep. Apart from paying for the health insurance deductible, the money at your savings account can also be used to pay for the qualified medical expenses which include eye and dental care. In case you withdraw money to pay for non-qualified medical expenses, you will be taxed at a rate in which you pay your income tax.
In addition to it will be charged an extra 20% if you
happen to be under 65 years. But after the calendar-year deductible is met, the
remaining covered expenses are being paid by the health insurance. The expenses
paid, however, are according to the terms and conditions of the plan you have
opted for. There are some plans which pay 100% of the covered expenses after
you have paid the calendar-year deductible.