Every day we look for ways to save money and one of the easiest ones can be found as part of your insurance plan. Many people do not know that they can use a Health Savings Account to save for health related items and can still keep the account even if they no longer have that particular insurance plan.
How do you know if you qualify?
Well to qualify for a Health Savings Account you simply need to have a High Deductible Health Plan (HDHP) with your current insurance provider. Once you have a High Deductible Health Plan that fits the criteria then you may opt for a Health Savings Account. You can choose your own Health Savings Account even if your current insurance provider does not offer one concurrently with your High Deductible Health Plan…but that takes a little more effort on your part.
Here are some more things you need to consider when attempting to get a Health Savings Account:
-You must have coverage under some type of High Deductible Health Plan
-You cannot be covered under low deductible insurance e.g. Medicare
-You cannot be claimed as a dependent on someone else’s tax return
Those are the basic things you will need to set up your own Health Savings Account. Of course if you are under a family plan then you can get a Health Savings Account that covers all qualified members, so don’t worry about the part about not being claimed as a dependent.
Once you get your Health Savings Account set up you can decide whether to keep the lower interest account they set up or move your money into a higher interest investment account.
You decide how and when to withdraw the funds in your account and you decide how and what to use the money for. Just bear in mind that if you use the money for something that is not health related then you will have to pay taxes on the amount used for non-qualified purchases.