Health Savings Account
There are several types of accounts available that can be used to help fund healthcare expenses. These include flexible spending account (FSA) health insurance and Health Savings Account (HSA) health insurance.
Heath Savings Account
The coverage provided by Health Savings Account (HSA) insurance consists of two parts: a high-deductible individual health insurance plan and an HSA. The two combine to protect a person from high medical bills should catastrophe strike; while absorbing any high-deductible that comes with it. You will also face lower premiums and the HSA is a tax-free savings account that can be used to pay for routine trips to the doctor and prescription drugs costs.
In an HSA the funds are controlled by the account holder and funds are contributed by the employee or employer, but never both. Savings are rolled over from year to year and are portable no matter the employee’s status. Funds can be accumulated, earn interest, and will not be taxed unless they are withdrawn for non-medical reasons.
If the account holder becomes disabled or reaches Medicare eligibility age, non-medical expenses are subject only to income tax and not the penalty tax.
Health savings account insurance carries a maximum contribution limit of 65% of the employee’s deductible and 75% of a family health insurance plan deductible.