Health Savings Accounts and High Deductible Health Plans

Offered to people participating in a High Deductible Health Plan, or HDHP, a Health Savings Account (HSA) is a medical savings account that allows people to collect their own untaxed funds to be used solely for medical reasons. Because individuals are contributing to these funds for health reasons, federal income tax is not withheld at the time of deposit. Consumers are in full control of the funds within the HSA, even determining how much money is placed into the account. Each year the un-taxed amount rolls over if unused and can be saved for either medical expenses or health costs after retiring.  Another benefit to this plan is that there is no third party to determine how, when, and where the money is spent.  The owner of the account in question is also able to their HSA investment options.

An HSA combined with an HDHP makes for a very viable alternative for health insurance for individuals.

 

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