6 benefits of choosing an HSA plan

A health savings account (HSA) can help you lower your taxes, pay health care expenses more easily and even save for retirement. 

HSA advantages:

1. You save on taxes

Your HSA contributions are tax-deductible.  They lower your taxable income – so you pay lower taxes. 

Example:

  • Your tax bracket: 25%
  • Your HSA contribution: $100/month ($1200/year)
  • You save:$300/year in taxes (25% of $1200 = $300)

 

2. You save on your medical expenses

Use your HSA money to pay coinsurance or copay amounts and your deductible (all tax-free).  And you can pay eligible expenses that may not be covered by your health plan, like dental care, orthodontia, vision care and many more. See a list of eligible expenses (PDF).

 

3. Your money works harder for you

  • It grows tax-free in an HSA account
  • Because you own your HSA, money you don't use one year rolls over to the next year
  • You are free to spend your HSA dollars on eligible expenses, save them, earn interest or invest for the future.

     

    4. You're in control

    You decide when and how to spend or save the money in your HSA.

     

    5. It's an investment

    You can invest a portion of your HSA balance in a wide variety of stocks, bonds and mutual funds.  And all your HSA earnings are tax-free

    6. Save for retirement

    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.

     

    More articles & resources Video – advantages of consumer-directed plans with accounts like HSAs How a health savings account (HSA) works More ways to save

    Note: There is a penalty if you use your HSA money for non-eligible expenses before age 65.