Considering a plan with a health savings account (HSA)? Here are some of the advantages.
You pay for eligible medical expenses from the health savings account, which means you decide when and how to spend your health care dollars. Get smarter about making quality health care choices by taking advantage of resources to help you shop for care . And, read more about how to save on health care costs.
If you choose a plan that works with an HSA, you can invest a portion of your unused HSA dollars in a wide variety of stocks, bonds and mutual funds.
Money that you don’t use in one year rolls over to the next year. Your money continues to grow, so you can take comfort knowing that your future health care expenses will be covered. The money is yours to keep (even if the HSA is offered through an employer and you leave the company or retire). The money in your account grows tax free and withdrawals are tax free when used for eligible health care expenses.
You can use your account to pay for eligible expenses that aren’t covered by your health plan – tax free. Expenses like dental care, orthodontia, and vision care are all eligible expenses under your HSA. You can also use your HSA to pay for your portion of expenses that are covered by your health plan, like deductibles and coinsurance for covered services. See a list of eligible expenses (PDF).
You put tax-deductible dollars in your health savings account, which reduces your taxable income – so you pay fewer taxes.
Withdrawals for qualified health care expenses are never taxed. You earn tax-free interest on the money in your account. This allows your money to work even harder for you. You don’t lose the money in your account at the end of the year. It’s yours to spend, save, earn interest and invest for the future.
You can use the account to save money for retirement. After age 65, you can withdraw money from your health savings account for any reason with no penalties. Find out more about saving for retirement.