Open Enrollment Reminder: Consider an HSA-Friendly Plan

It’s that time of year again to renew your health insurance or choose a new plan. As you compare options, it’s worth looking at plans that allow a Health Savings Account (HSA) — usually these are high-deductible health plans.

An HSA is a special account you can use to save money for medical expenses and get tax benefits at the same time. Here are 3 common HSA benefits in simple terms:

1️⃣ Lower your taxes nowMoney you put into an HSA is usually pre-tax (or tax-deductible), which reduces your taxable income for the year.

2️⃣ Grow your savings over timeThe money in your HSA can stay there year after year (no “use it or lose it”). In many cases it can be invested, so it has the potential to grow for future medical needs.

3️⃣ Tax-free when used for medical costsWhen you use HSA funds for qualified medical expenses (doctor visits, prescriptions, some dental/vision, etc.), you can spend that money tax-free.

💡 Extra “know-how” tip:If your budget allows, you can pay current medical expenses out of pocket, keep good records and receipts, and let your HSA stay invested and grow. Then, years later, you can reimburse yourself from the HSA for those past expenses and take that money out tax-free when you actually need it.

If you’re choosing between plans, it can be helpful to compare not just the premiums, but also how an HSA might help you save on taxes and build a long-term healthcare (and backup) savings pool.