As the cost of healthcare has increased, HSAs, also known as a Health Savings Account, have become more and more popular. An HSA is a great way to save for medical expenses while also reducing taxable income. HSAs are often used in conjunction with a high deductible health plan (HDHP). With a high deductible health plan, you pay a lower monthly premium, but in the event that you do need medical care, you end up paying a larger cost up front. Thus, a Health Savings Account is a great option for individuals who want a lower cost health insurance plan like an HDHP, but still
By Emily P. Walker, Washington Correspondent, MedPage Today WASHINGTON — Enrollment in high-deductible health insurance plans that are tied to health savings accounts (HSAs) grew by nearly 14% in the past year, according to America’s Health Insurance Plans (AHIP), an industry trade group. As of January 2011, 11.4 million Americans are covered by high-deductible plans, which are eligible to be coupled with an HSA that can be rolled over from year to year and can be used at any time to pay medical expenses. AHIP, which takes an annual census of enrollment in HSA-eligible plans, found that enrollment in the plans has nearly doubled over the
Flexible Spending Account (FSA) With an FSA, money (in the amount you choose) is taken out of your paycheck before taxes and put into an account. The money in this account can be used to pay for medical expenses throughout the year and can be used in conjunction with any health insurance plan. The most important aspect of FSAs is that they have a “use it or lose it” provision. You must use the funds in the account in the year in which those funds were saved or you will lose them at the end of the year when they are returned to your employer.