Learn about high-deductible health plans and how you can get tax savings when you use it with a Health Savings Account (HSA).
Do the words "high deductible" give you pause when you hear about high deductible health plans? Medical Mutual encourages you to look past those two words. We think you will find that a qualified high deductible health plan, when coupled with a health savings account, can reduce your overall costs, while building tax exempt savings for future medical expenses.
Here’s how it works. A high deductible health plan requires you to pay out of pocket until you meet the deductible amount. Because these deductibles are often higher than in traditional health plans, a health savings account, or HSA as it’s called, can help you pay for these out of pocket costs. High deductible plans that qualify to be paired with an HSA cover preventive care at 100%. You can check with your benefit administrator for a list of services.
These plans also have several tax advantages. You save because any HSA contributions by you or by your company are tax exempt. And money you take out of the HSA for qualified medical expenses is also tax exempt. Opening an HSA is easy. If you enroll on your own, you choose which bank or financial custodian will handle your account. If you enroll through your employer, they will often make that decision for you. Wherever you open your HSA, the balance rolls over each year and can be used to pay for qualified medical expenses, even if you change health plans, retire, or leave your company. And once you reach age 65, you can also withdraw the money as taxable income for any other purpose. Your actual savings will depend on how much you take out of the HSA to pay for yearly medical services. If you qualify, you can even use the money for investment opportunities, such as a mutual fund or interest bearing account. Your earnings are tax free.
If you have questions, see your benefits administrator.
Choosing a HDHP or Copay Plan Video