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5 things you need to know about Health Savings Accounts

3 min read

30 sec brief

Need help understanding the health, savings and tax value of the HSA? HSAs aren’t new but are often misunderstood and their benefits are as long and as their health savings potential.

Need help understanding the health, savings and tax value of the HSA? HSAs aren’t new but are often misunderstood and their benefits are as long and as their health savings potential.

5 HSA Tips

Here are the 5 things you need to know to get started or to optimize your HSA.

  1. It’s Free – There are many existing and traditional HSA providers in the market, so this is not universally true. Lively’s HSA is 100% free for individuals and families. No hidden fees. No transfer costs. None! Healthcare can be hard, saving should be easy. Full pricing details here. (Spoiler Alert – Look for the word FREE in big, giant letters)
  2. It lasts for years to come. HSAs aren’t tied to plan contracts, renewals, or open enrollment. You can open an HSA anytime (as long as you are eligible) and it goes with you from job to job or provider to provider. Unlike an FSA, there is no annual “use it or lost it” provision. It’s your money to use when you need to most today or 20 years from now.
  3. It’s 100% Tax-Free – If you are at all familiar with HSAs you understand their triple-tax advantages: tax-free contributions, tax-free investments and tax-free deductions (when used for qualified out-of-pocket medical expenses. If you are new to HSAs, this provides a direct way to save money when healthcare costs continue to rise. To top that off, HSA Investments offer another way to save even more.
  4. How You Qualify – You must use an HSA-eligible high-deductible health plan (HDHP). Under 2019 federal regulations, HDHPs that qualify must have deductibles of $1,350 or more for an individual and $2,700 for a family. Additionally, the annual out-of-pocket maximum on the plans can’t be great than $6,750 for individuals or $13,300 for families and you have to pay for all expenses until you hit your deductible – no insurance cost share before that. If your employer does not offer an HSA as part of your high deductible health plan, you can sign up as an individual (or family) and contribute.
  5. Contribution Limits – 2019 HSA contributions are $3,500 for individuals and $7,000 for families. Individuals over 55 years of age, can add an additional $1,000 per year in catch up contributions.

These are the most obvious benefits of HSAs, but the benefits grow further when you consider the HSA as a retirement savings vehicle. The HSA provides a clear path to dedicated health savings. It’s time to consider healthcare and benefits over a 5-10 year period and not limit it to a yearly view.

Disclaimer: the content presented in this article are for informational purposes only, and is not, and must not be considered tax, investment, legal, accounting or financial planning advice, nor a recommendation as to a specific course of action. Investors should consult all available information, including fund prospectuses, and consult with appropriate tax, investment, accounting, legal, and accounting professionals, as appropriate, before making any investment or utilizing any financial planning strategy.

About the author

Lively

We are HSA Experts! Lively is a Health Savings Account (HSA) platform for employers and individuals. A 401(k) for healthcare.

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