When it comes to your well-being, financial planning can play a vital role. Health Savings Accounts (HSAs) are a smart way to safeguard your health and your finances at the same time. At INB, we're dedicated to helping you achieve healthier savings and, as a result, happier tomorrows. Read on to learn what HSA accounts are, how they work, and why they can be a game-changer for your financial future.
What is an HSA?
An INB HSA (Health Savings Account) is a tax-advantaged savings account paired with a high-deductible health insurance plan (HDHP). An HSA is intended to cover qualified medical expenses not covered by a high deductible plan, including the deductible itself. It's like a personal healthcare nest egg that allows you to put money aside for medical costs while also enjoying attractive tax benefits and, in most cases, lower insurance premiums.
Not everyone qualifies for an HSA. First, you must be covered by an HDHP. You’re not eligible if you are:
- Covered by another health insurance plan that is not a qualified HDHP.
- Claimed as a dependent on another person’s tax return.
- Enrolled in Medicare benefits.
Your insurance provider can confirm eligibility.
Triple Tax Benefits Make HSAs Stand Out Among Savings Tools
One of the most compelling features of HSAs is their triple tax advantage:
Tax-Deductible Contributions: When you contribute to your HSA, your contributions are tax-deductible. This means you can reduce your taxable income for the year, potentially leading to a lower tax bill.
Tax-Free Growth: Any interest earned on the money in your HSA account grows tax-free. This compound growth can significantly boost your savings over time.
Tax-Free Withdrawals: The real magic happens when you use your HSA funds for qualified medical expenses. These withdrawals are entirely tax-free, ensuring that every dollar you spend on healthcare goes further.
Flexibility Key Feature of HSAs
HSAs offer unparalleled flexibility:
You can use your HSA funds to cover a wide range of qualified medical expenses, including doctor visits, prescription medications, dental care, and more. Unlike Flexible Spending Accounts (FSAs), there's no "use it or lose it" policy. Any unused HSA funds roll over from year to year, allowing your savings to accumulate over time.
You have complete control over your HSA funds. Use them when and how you need them, whether it's for immediate healthcare needs or saving for medical expenses in retirement.
Your Roadmap to a Healthier, Happier Tomorrow
With an INB HSA, you're not just saving for healthcare costs; you're investing in your future well-being. Here's how you can make the most of your HSA:
Contribute Regularly: Make consistent contributions to your HSA to build a robust healthcare fund for both short-term and long-term needs. You, your employer, or anyone else can make these contributions. While most employers offering HDHP also provide employees with a banking relationship for the HSA account, you can choose where you open your account. We hope you’ll choose INB!
Stay Informed: Maximize your benefits by understanding HSA IRS guidelines and eligible medical expenses.
Plan for Retirement: An HSA allows you to plan for medical expenses you’ll likely have as you grow older, all without penalties. If you’re fortunate enough to reach age 65 and not need your HSA to cover healthcare needs, you can use your HSA funds however you’d like. Note you will pay income taxes on withdrawals used for non-medical expenses.
Join INB for a Healthier, Happier Tomorrow
At INB, we believe that a healthier tomorrow begins with smarter financial planning today. Our HSAs are designed to empower you to take control of your healthcare costs while enjoying tax advantages that promote financial well-being.
Don't wait; start your journey towards a healthier savings account and a happier tomorrow. You can open an account online, or stop by any INB branch.