A Health Savings Account, or an HSA, is a type of savings account that allows pre-taxed money to be saved to be used only for qualified medical expenses. You can save an allotted amount per year, contributions are invested, and unused balances can be rolled over. Both employers and employees can contribute to employer sponsored accounts. And many individuals are eligible if they have a high-deductible health plan.

What are the benefits of an HSA?

A Health Savings Account is another great way to invest your money in order to build wealth. And it has many benefits to those who are eligible. An HSA is excluded from taxable income, and earnings within your account are tax-free as well. As long as an HSA is used for qualified medical expenses, they remain tax-free and can even be countered towards a deductible for certain plans.

Who is eligible for an HSA?

Individuals who are qualified for a Health Savings Plan have a qualified high-deductible health plan, no other health coverage, not a dependent, and not enrolled in Medicare. Check irs.gov for current  contribution limits.

If you are interested in having an HSA, it is possible to get one through a financial institution, such as a bank or a financial advisor, or through your employer if they offer it. Contributions may be only made in cash or by an employer. And any individual may make a contribution for another. Eligible self employed people can also open an HSA.

If you qualify for an HSA it is a good idea to start investing immediately. The investments made to grow a savings account specifically for a high expense like healthcare should be utilized to ensure financial security and freedom for you and your family. Talk with you financial advisor today to see if you are eligible for a health savings plan. Your financial future could depend on it!

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