About 24% of companies that provide health benefits offer high-deductible health plans that qualify for an HSA. Some companies only offer plans with high deductibles. However, some people with access to multiple plans offered by their employers still choose these high deductible plans as they prefer to pay lower premiums and assume they will be healthy and thus save money. If your employer offers you a high-deductible health plan, you can also contract with a bank and open an HSA account.
But you can also open your own account. HSAs are offered by hundreds of banks and credit unions , and since the interest rates they pay, the fees they charge, and the features they offer can vary, it’s worth finding out before you decide. And HSAs are portable. “If you are not satisfied with the HSA provider, you can switch to another at any time,” says Eric Remjeske, president and co-founder of Devenir, a Minneapolis-based HSA consultant.
Becoming offers an HSA online search tool , which allows consumers to compare more than 350 providers. Often times, if you switch from one HSA provider to another, the HSA you’re transferring to pays the closing fee charged by the HSA you’re exiting.
You can ask your employer to contribute your income before taxes to any HSA you designate. They are currently up to $ 3,400 per year for individuals and $ 6,750 for families.
“What you contribute immediately leads to significant tax savings , and as long as you spend money on qualifying medical expenses, it is tax-free when you use it,” says Greg Geisler, associate professor of accounting at the University of Missouri – St. . Louis.
These expenses include doctor visits, surgery, prescription drugs, and physical therapy.
Keep in mind that you are also not required to spend all of the money in an HSA in a given year as is generally the case with flexible spending accounts. This means that if you can afford your current health care expenses, investing in an HSA today can help you fund medical expenses when you retire, when they are likely to be highest. If you don’t spend it all, your heirs will inherit the balance.