What is an HSA?
A Health Savings Account (HSA) is an interest-earning, tax-free account that is an option with certain qualified health insurance plans. You open your HSA with a bank or other financial institution. Then you can contribute and draw from that account, just as you would from any other savings account. Funds in an HSA must only be used for qualified medical expenses; otherwise, they could be subject to taxes and other penalties.
What are the rules of an HSA?
Here are important rules to consider with regards to qualifying for and using a Health Savings Account:
- You must have a qualified High Deductible Health Plan – In order to open an HSA, you need to be enrolled in a qualifying High Deductible Health Plan (HDHP). A qualified HDHP has specific limits for the annual deductible and maximum limits for out-of-pocket expenses. These limits are defined by the IRS and change annually.
- Under Age 65 – In order to qualify for an HSA, you must be under the age of 65 and not enrolled in Medicare.
- No other health plans – Your High Deductible Health Plan must be your only health plan; you can’t be covered by any other health insurance.
- Open an account – Once you have purchased a qualified health plan that is HSA eligible, you can set up an HSA through your bank or other IRS-approved HSA trustee.
- Tax-free, interest-earning – One of the major benefits of an HSA is that the funds you contribute to your account will be interest-earning, tax-free and have no use-it-or-lose-it limits; this means if you don’t spend all of the money you contributed to your HSA account in a year, the balance rolls over to the next year, continues to build interest and maintains its tax-free status.
- Funds used for qualified health-related expenses – The money you contribute to your HSA is meant to be used for medical expenses such as deductibles and co-pays. You can withdraw funds from an HSA for nonmedical purposes but be aware that you will then have to pay taxes on the money and a penalty fee if you withdraw before you are 65. If you withdraw money after you turn 65, you will only pay taxes and not a penalty.
Advantages and Disadvantages of an HSA
As with any health plan, there are advantages and disadvantages to choosing a High Deductible Health Plan with an HSA. These are important to keep in mind when deciding on the right type of plan for you and your family.
- HSAs allow you to set aside money that can go towards meeting the high deductible of your chosen qualified health plan
- HSA contributions don’t count toward your taxable income for federal taxes
- HSAs provide a way to pay for qualified healthcare expenses now and, because the money you save earns interest, they allow you to grow your savings for future healthcare needs
- The money you contribute always belongs to you and unused funds carry over from year to year, so you won’t have to worry about losing your money
- Your HSA belongs to you, so any money in your account, including any your employer puts in, goes with you no matter where you work
- It may be difficult to set aside funds into an HSA account if you struggle financially or have lots of medical expenses
- If you struggle to put money into an HSA, you may avoid medical visits due to having a high-deductible and no immediate funds on hand to pay for medical services
- You will be taxed on any money you withdraw from an HSA for nonmedical expenses and could incur other penalties
It can be hard to accurately budget for medical expenses due to the unpredictable nature of an illness
According to David Cantu, Vice President of Marketing, Sales and Public Relations for SelectAccount, a health savings account (HSA) custodian/account administrator organization, “Employers are moving towards Consumer-Directed Health Plans (CDHPs) for their employee populations with little or no access to cost effective consumerism tools to complement the CDHP health benefit. With this shift to CDHPs, people are looking to shop for health care like they do for other purchases, making decisions based on the cost of care, best treatment options and peer support.”
To help guide consumers on making informed choices, WiserTogether, Inc., the treatment transparency company which offers Wiser Health – a personalized health care treatment decision support solution for consumers – announced today that SelectAccount will offer Wiser Health as part of its WalletDoc consumerism suite of tools to help account holders make informed decisions about their health and their health savings account dollars. The goal of this collaboration: to help members in high deductible health plans or in tax-advantaged health savings accounts to better understand their treatment options and the associated costs; and to enable more productive, engaged conversations with healthcare providers.
Press Release Follows
SelectAccount Helps Account Holders Use Their HSA Dollars Smartly by Offering WiserTogether’s Treatment Decision Support Solution
WASHINGTON, April 29, 2015 /PRNewswire/ — WiserTogether, Inc., the treatment transparency company which offers Wiser Health – a personalized health care treatment decision support solution for consumers – announced that SelectAccount will offer Wiser Health as part of its WalletDoc consumerism suite of tools to help account holders make informed decisions about their health and their health savings account dollars.
As one of the largest health savings account (HSA) custodians and account administrators, SelectAccount offers an extensive suite of online resources to help account holders make smarter health care decisions for them and their budget. By including Wiser Health in the WalletDoc suite of tools, SelectAccount is at the forefront of helping account holders become smarter consumers of health care by making better health decisions based on cost of care, treatment options and peer support. Wiser Health will be available on the Online Member Service Center where account holders check their account balances and pay claims and other expenses. The seamless user experience gives account holders access to the market-leading treatment decision support solution and a way to understand available treatment options and likely costs at the point-of-decision.
Wiser Health is the only comprehensive solution that enables users to find, compare and engage with treatment options based on clinical outcomes, effectiveness, cost, difficulty and popular preferences. With a unique database of over four million consumer health and treatment decisions, users can compare and select treatments based on what matters to them. This results in better outcomes, reduced costs, greater savings and higher member satisfaction.
“By offering Wiser Health, SelectAccount has taken an industry-leading step in supporting account holders at a key consumer decision moment in health care. Cost conscious consumers looking to spend their tax-advantaged health savings dollars in the most efficient way, will now have access to the Wiser Health solution right from their account platform. This helps account holders better manage their health while maximizing their savings and account holdings,” said Dr. Shub Debgupta, CEO of WiserTogether. “Wiser Health helps members in high deductible health plans or in tax-advantaged health savings accounts, to better understand their treatment options and their associated costs. This is the first and crucial step in the journey towards consumerism and will help SelectAccount’s members have more productive and engaged conversations with their healthcare providers, thus saving them even more time and money,” added Dr. Debgupta.
“Employers are moving towards Consumer-Directed Health Plans (CDHPs) for their employee populations with little or no access to cost effective consumerism tools to complement the CDHP health benefit,” according to David Cantu, SelectAccount Vice President of Marketing, Sales and Public Relations. “With this shift to CDHPs, people are looking to shop for health care like they do for other purchases, making decisions based on the cost of care, best treatment options and peer support. To address the need for comprehensive information in a convenient location, WalletDoc has incorporated leading edge technology platforms like Wiser Health into our Online Member Service Center where people are checking their balances and paying claims when faced with health care expenses.”
About WiserTogether, Inc. WiserTogether’s personalized healthcare treatment comparison software enables consumers to choose the right treatment – most effective in outcome, most personally suitable, and most cost-effective and affordable. The result is improved health and improved costs for consumers, their employers, payers and providers. The company serves over 3 million people through their employers and health plans.
For more information about WiserTogether, please visit our website at www.wisertogether.com.
About SelectAccount SelectAccount has been driving innovation in medical savings administration for over 25 years. They offer a full suite of tax-advantaged solutions – HSA, HRA, FSA, VEBA, transportation and dependent care accounts to meet client’s changing needs as they plan for their health care expenditures. They are one of the leading medical savings administrators in the country managing more than half a billion dollars in consumer medical account savings assets integrated with numerous partner data exchange connections, serving 7,000 employers with account holders in all 50 states. MII Life, Inc., d.b.a. SelectAccount has been approved by the U.S. Department of Treasury as a non-bank HSA Trustee. SelectAccount is headquartered in Eagan, Minnesota with an office located in Chicago, Illinois. Visit www.SelectAccount.com to learn more.
WiserTogether Contact: Catherine Riedel firstname.lastname@example.org 312-209-0250
SOURCE WiserTogether, Inc.
More by this company
- WiserTogether Releases Next Generation Personalization for Improved Treatment Evaluation and Decision Making Posted On Mar 31, 2015, 01:04 PDT
- WiserTogether Announces the Addition of Healthwise as a Content Partner for its Award-Winning Wiser Health Solution Posted On Mar 31, 2015, 01:01 PDT
- WiserTogether Adds Well-Known Industry Veterans to Senior Management Team Posted On Feb 18, 2015, 05:26 PST
 SOURCE, Humana, see link https://www.humana.com/individual-and-family/products-and-services/medical-plans/health-savings-account