HSA

HSA stands for health savings account, an alternative to more traditional health insurance. The main difference offered by HSAs lies in the way consumers pay for their healthcare. Through an HSA, consumers are able to pay for current medical expenses while saving tax-free money for qualified future medical costs.

HSAs: The Basics

In order to take advantage of the benefits of an HSA, one has to be covered by a HDHP - high deductible health plan. Typically, such plans are far less expensive than other healthcare plans, allowing the saved money to be put into the HSA instead. The main advantage of this is that any money placed into the HSA is entirely controlled by the consumer, with no need for a third party or health insurance provider to provide permission.

A high deductible health plan is generally inexpensive because it does not pay for the initial several thousands of dollars of expenses (each plan has a different threshold). Qualifying for an HSA requires that this deductible be at least $1,150 dollars for individuals and $2,300 for families. Additionally, out-of-pocket expenses cannot be more than $5,800 dollars for individuals and $11,600 dollars for families per year.

As opposed to most health plans in which consumers have to pay a set amount each month, an HSA doesn't cost anything. The money you put into the plan is the money you will be drawing from to cover your medical expenses. The only thing that needs to be purchased is the HDHP - but that is designed to cover any excessive medical costs that may incur which are beyond the funds available in the HSA.

...more about HSAs

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Consumer-Directed Health Plans

Consumer-Driven Health Accounts

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