Establishing a health savings account

What is a health savings account?

Members who are enrolled in a high deductible health plan (HDHP) might want to consider a health savings account (HSA). This tax-advantaged account offers a way for people with HDHPs to save up for medical expenses while earning interest on their account. Unfortunately, few Americans understand how they work. According to a report from InsuranceQuotes.com, most Americans are confused about the aspects of HSAs.

Among survey respondents, 52 percent incorrectly thought they could use HSAs to pay for over-the-counter medication and 51 percent thought they could use them to pay for health insurance premiums – which they can’t. Only 14 percent of the survey respondents actually knew that an HSA must be paired with an HDHP.

Is HSA Checking right for you?

If you have that high of a deductible, however, you should consider an HSA. The contributions you make to your HSA are exempt from federal taxes and the account can be invested. This makes them function somewhat like IRAs, except that you can use the accumulated funds to defray the out-of-pocket cost of your plan’s deductible.

HSAs are a good way to “close the gap” between what’s covered and what you have to cover when paying for your health care. HDHPs are becoming more common so it is important to plan for future medical expenses before you’re staring at a hefty health care bill.

With the rising cost of health care, saving now through a Health Savings Account offered by Travis Credit Union may be a good option for you. To open a HSA Checking account, visit a branch during normal business hours or call (800) 877-8328.

Health Savings Account