Gone are the days of the health care plan where everything from broken bones to child birth is covered 100% under your medical insurance. Today’s reality is that many health care plans come with high deductibles and an even higher level of stress when someone in the family needs to see a doctor. A Health Savings Account may just be the answer for you and your family.

What is an HSA?
A Health Savings Account or HSA is a personal savings account to be used specifically for health care. HSAs were first introduced in 2003 as a way to allow individuals who have high insurance deductibles a tax-free way of saving for future medical expenses.

Who qualifies for an HSA account?
Because money contributed to an HSA is not taxed, HSAs are regulated. To qualify for an HSA, individuals must be younger than 65 years and have a high medical insurance deductible (at least $1,300 for an individual or $2,600 per family). The monthly premium for healthcare insurance is generally lower and allows individuals to contribute to their own medical savings accounts because of the higher deductible.

Benefits of HSA’s:
The beauty of an HSA account is that it allows individuals to have more control over health care decisions. The theory is if you are spending your own money on health care, you will be more cautious with spending, for example, visiting your doctor’s offices or emergency room only when absolutely necessary. Also, because you will be paying for services with cash, you can negotiate for the best possible prices, thus making the medical industry more competitive.

Negatives of HSA’s:
Because of having to dip into your HSA to pay for medical care, some people may not seek the medical help they need, which could lead to more serious health issues down the road. Keep in mind that savings in an HSA can only be used for medical purposes. You can’t buy your new car or go on your dream vacation using HSA savings.

What to do:
In most cases, employers will dictate whether you have an option to choose an HSA or not. If your company currently offers a high deductible health care plan, then opening an HSA account is a smart, tax-free way to save. If you are self-employed, then take into consideration family medical history, pre-existing conditions, and plans for the future. Also very important is the family budget.

Regardless of what you decide, do your homework and don’t go without health insurance. If nothing else, you will sleep better at night. Ask a Goldenwest account specialist for more information and to get started today.