Getting The Most From Your Health Savings Account

With the number of high-deductible health insurance policies increasing, having a Health Savings Account (HSA) can be the best option to provide peace of mind when planning for future medical needs. 

HSAs are interest-bearing accounts with real tax advantages. They are funded with pre-tax dollars; contributions are not subject to the 6.7% Federal Insurance Contributions Act tax. Unlike Flexible Spending Accounts, funds that remain in an HSA at the end of the year can be rolled over to use in subsequent years.  

Here are some simple ways to get the most out of your Health Savings Account: 

• Withdrawing money from your HSA is as simple as using a checking account. You can use blank checks, a debit card or both. 
• In order to use your HSA for medications, you must have a prescription (with the exception of insulin).
• Take advantage of any available employer contributions. 
• Non-traditional medical services like acupuncture and massages can qualify as HSA expenses as long as you have a prescription.
• If at all possible, avoid using your HSA for non-medical expenses before the age of 65 to avoid a 20% tax on the amount of the withdrawal. 
• If you are audited, you must prove that the account was used for qualified expenses, so save all your receipts and bills for your out-of-pocket health expenses.

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