Health Savings Accounts (HSA) is similar to other personal savings accounts, except the funds in them are used primarily to pay for health-related expenses. The money in an HSA is not tax-deductible. However, to be eligible to open an HSA you must already have a special form of health insurance called an HSA. In general, all health plans considered high-deductibles are considered to be eligible for an HSA. When you go to apply for your health savings account, some financial institutions will ask if you already have an HSA and will offer an upgrade to your current plan with a higher deductible.
There are many good reasons to consider having health savings accounts. Probably the most obvious reason is to provide funds to help you pay for medical care in the future. By having a high deductible health plan, it is much more affordable to take medical care now than it would be if you had to pay completely out-of-pocket for a hospital bill tomorrow. If you are healthy now, it is best to avoid major medical care until you are older and your health insurance becomes better.
People who are younger but already have health conditions that could turn them into a risk should consider getting health savings accounts. The premiums for these policies are often much lower than they would be for traditional health plans. But even younger individuals should consider making future investments. The reason is that there are two types of health savings accounts: Health Maintenance Organizations and Preferred Provider Organizations. Health maintenance organizations have minimum contribution requirements and annual premium payments; while preferred provider organizations have no minimum contribution or annual premium payments. Both types of plans allow you to save money for the future by using the money that you pay into them in the future for health-related expenses that you might become afflicted with.
The most obvious benefit of health savings accounts is that they can cover a wide variety of medical expenses. You do not have to have an extremely low income and you do not have to have access to a health insurance policy. The money that you put into your health savings account goes directly to paying for medical expenses today. This means that you never have to worry about running out of money to pay for your medical expenses. The account will handle all of these expenses for you, and you never have to worry about what is going into your pocket.
Another benefit of health savings accounts is the peace of mind that comes from being able to prepare for the future. If you are unsure about the cost of future medical expenses, it is nice to know that you have funds set aside to cover them. If you have other insurance policies, you will know how much you will need to set aside for health care each month and will be able to budget accordingly. If you do not have health care insurance, you will not know what your expenses will be and how much you will have available to pay them.
Finally, the benefit of having health savings accounts is the peace of mind that comes from being able to prepare for the future. When you take money out of your health plan, it does not go to just any purpose. You will be using it to pay your medical costs right now. It does not mean that you will not have any expenses in the future. In fact, the more expenses that you have, the less money that you will have available in your pocket. Health savings accounts will allow you to plan ahead for the future so that you do not have to be caught off guard financially.