A Health Savings Account (HSA) is essentially a savings account for health with tax benefits. It is mostly designed to bridge the gap for insurance coverage via high-deductible health plans (HDHPs). Typically, payments are made at pre-defined intervals both by the employee and employer. The balance can then be used to cover medical treatment outside of regular HDHPs.
There are generally agreed limits which can be used to pay from different categories of healthcare including vision, dental and prescriptions as well as general health.
Although max contribution payments can vary depending on the type of HSA account, typically the upper limit is €3,600 per HSA eligible person and €7,200 for a family. American citizens who qualify can open an HSA easily online using many of the HSA providers. One thing to bear in mind is if you are enrolled in Medicare then contributions to HSA Savings Accounts are no longer allowed from the first month of enrolment.
One of the better HSA accounts is Starship HSA. You can sign up in minutes when you download the app. Alternatively, you can read the full Starship HSA Review to find more information on HSA Provider accounts.
- Both contributions by employer and employees are often excluded from the employer’s taxable income.
- Funds in an HSA account or HSA Insurance plan can be used to invest in securities such as stocks allowing for higher returns over time.