If your employer offers a high-deductible health insurance plan, you may have also been told you can make payroll deductions to a health savings account (HSA). HSA funds are deducted before taxes, so they can reduce your yearly tax burden. The money can be used to pay for deductible, office visit copayments and prescriptions. Essentially, HSAs provide a tax-free way to pay for some health care costs not covered by insurance.
A couple of factors can determine whether a high-deductible plan with an HSA is your best option:
1. HSA funds roll over from year-to-year. That means money you save now could be used for illnesses in the future.
2. If you have a chronic illness and need care or medication, you will have to cover your deductible before receiving any insurance payments. That could mean having to spend thousands of dollars out-of-pocket.
3. Some employers will contribute to your HSA account. This can be a substantial benefit since it is also tax-free.
4. You control how HSA funds will be spent.
5. If you have debts or low savings, putting money into an HSA can be a financial burden. Paying your deductible may also prove to be a challenge.
To learn more about health insurance options in the Los Angeles, California area, contact Save-On Health Insurance Services.
