New data reveals that the average American doesn’t have enough savings to cover a $1K emergency. When faced with this dilemma, most Americans use their credit card to pay for these costs (health or otherwise).

Save Money on Healthcare Costs

If there are ways to save money, tax-free, shouldn’t you take advantage of this offer? On top of saving money in case of a medical emergency, using an HSA enables you to save pre-tax dollars as well. Use an HSA to save money on healthcare costs.

Contributing to your HSA, to save or invest, creates a dedicated account for health-related financial emergencies. If you get started today and make recurring or one-time contributions, you will be covered for life! An HSA never expires or requires mandatory distributions. If you never need the money, after the age of 65, you can use it for anything like a 401k or IRA and pay no penalty.

You need accessible disposable income to make contributions to your HSA. If that is not the case, HSAs do have some unique flexibility to help you save money, after your health-related bills arrive.

IRS rules stipulate that you only need to “establish” HSA before you can reimburse yourself for qualified medical expenses. This varies from state to state, but generally speaking if you have opened an HSA, and added as little as $.01 you are in good standing. These two simple actions will enable you to contribute to your HSA after you have received a qualified out-of-pocket medical expense. From there, you can use those new tax-free HSA funds for payment.

This creates a 25% (assumed pre-tax payroll contributions with at least 25% state and federal tax savings) price savings for qualified out-of-pocket medical expenses when you use your HSA.