Health Savings Account, or HSA insurance plan, are tax-advantaged medical savings accounts. HSAs can shoulder medical costs by allowing clients to save tax-deductible money in a health savings account. The finances contributed to the account are free from federal income tax.
With an HSA you get a high-deductible insurance policy and open a savings account specifically for medical expenses. The savings account is funded with pre-tax dollars so anything you spend from that account is tax-exempt, as long as it goes to a legitimate health expense.
Aside from money saved up for medical purposes, HSA funds can also gain interest. Additionally, any portion of your HSA contribution that has not been spent on medical expenses will roll over. If invested well, these rollovers can gain in value. HSA insurance plans are individually-owned as compared to company-owned so you have full control over the plan.
HSA health insurance allows you more control over your health care choices. There are many more things that you can use your money for so when you get a HSA insurance plan by looking into the full list of coverage. It covers medical expenses traditionally covered by health insurance but it also covers things often not covered by insurance; chiropractors checkups, dental services, over-the-counter medications, laser eye surgery and much more.
Many people save a great amount of money by changing from conventional health insurance plan to a Health Savings Account plan. But is an HSA right for you? That depends. Relatively healthy people benefit most from this type of insurance plan, or any high-deductible health plan. Healthy people save money on high-deductible insurance policies because the monthly premiums are lower and there is not much insurance used.
You will likely be better off with a more traditional insurance policy if you expect to spend through your high deductible. It should also be noted that you cannot have an HSA and regular insurance health plans at the same time. If your employer provides health insurance, an HSA is not an option for you. That said, more and more employers are offering HSA as an option for their employees.