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Health Savings Account

An HSA is a special account where you can save money for medical, prescription, dental and vision needs.

It’s only available with a high-deductible health plan, like the Silver option.

Understanding the HSA

A Health Savings Account (HSA) is a tax-advantaged account where you save money to pay qualified healthcare expenses, as defined by the IRS. Qualified expenses include medical, prescription, dental and vision costs for yourself and your dependents covered under the HDHP.

Current HSA Limit

Employee only coverage: $4,100
Family coverage: $8,250

 

The company-set limits are within IRS guidelines and allow a $50 cushion for amortized paycheck deductions.

We describe an HSA as “triple tax-advantaged” because it saves you money on taxes in three ways.

Save taxes with an HSA three ways

1

CONTRIBUTIONS
are pretax (so your gross pay is lower for tax purposes, too)

2

INTEREST
accrues untaxed

3

EXPENDITURES
for qualified expenses
are tax-free

 

The HSA has great tax advantages like a 401(k), in addition to the following features:

You earn interest
Your account balance grows until you spend it.

Contribution

Interest

Interest on interest

Rollover feature
Your balance rolls over year-to-year with no “use it or lose it” rules

HSA balance

 

Change jobs

Retire

Investment options
HSA funds can be invested to grow your savings for the future, including retirement

HSA funds

Mutual funds

Future savings

2The Silver option is a high-deductible health plan. You pay 100% of the cost of your healthcare expenses until you reach the deductible. After you meet the deductible, you share the cost of coverage (coinsurance) until you meet your annual out-of-pocket maximum.

And there’s another advantage of an HSA: you never lose it. The balance rolls over year to year, and you can even take it with you if leave the company or retire.

Use your HSA balance three ways

1

USE IT NOW
to pay your deductible and coinsurance

2

SAVE IT
for planned or unplanned future healthcare needs–the balance rolls over year to year

3

LET THE BALANCE GROW
with interest or through investment options—to use in retirement

High-deductible health plan

The Silver option offered by Asurion Benefits Central is a high-deductible health plan or HDHP. An HDHP is consumer-driven, meaning that you, as the consumer of healthcare, have the authority to direct your own care.
Check out this general comparison of healthcare options.

 

Preferred provider organization

(PPO)

High Deductible
Health Plan

(HDHP)

PREVENTIVE CARE COVERED 100%?

Yes

Yes

HAS AN ANNUAL DEDUCTIBLE?

Yes

Yes

HAS AN ANNUAL OUT-OF-POCKET
MAXIMUM?

Yes

Yes

OUT-OF-NETWORK COVERAGE?

Usually; often at a higher
out-of-pocket rate

Yes, but at a higher
out-of-pocket rate

REQUIRES A COPAYMENT WHEN YOU SEE A PROVIDER?

Yes

No

CAN USE A HEALTH SAVINGS ACCOUNT (HSA) TO PAY FOR CARE (DEDUCTIBLE AND COINSURANCE)?

No

Yes

The HDHP has two key differences from a traditional PPO

1

Copayments versus coinsurance

In a traditional PPO you pay a copayment to see a provider, whereas in the Silver option HDHP, you pay all of your cost of care out of pocket until you reach the deductible.

2

HSA

In both options you pay 25-30% of your care in coinsurance after you meet the deductible (in-network). If you plan ahead to save money in your HSA per paycheck, you can be ready if high healthcare costs hit.


 

Can I have an HSA and FSA?

Sometimes all of these names and abbreviations might seem like alphabet soup. But Health Savings Accounts (HSAs) and healthcare flexible spending accounts (FSAs) are both important pretax savings accounts, and it’s worth understanding both of them. You may choose one or both—did you know they can work together?

You can contribute to both of these accounts on a pretax basis. But, bottom line, if you’d like to have an HSA, you must choose the Silver option. This is the only option offered by Asurion Benefits Central that meets the IRS’ qualification of being a high-deductible health plan (HDHP). If you choose the Silver option, you may also open a Dental and Vision FSA—because you’ll use your HSA for medical and prescription expenses.

Health Savings Account

Dental and Vision Flexible Spending Account

Available to those who are enrolled in the Silver medical option, a high-deductible health plan—this is an IRS rule.

  • Use during the plan year or save for a future expense.
  • Unused balance rolls over year to year.

Available to those who are enrolled in the Silver medical option, a high-deductible health plan—this is an IRS rule.

  • Use during the plan year for dental and vision expenses.
  • Must use the full amount or it’s forfeited.

Qualified expenses for the HSA include medical, prescription, dental and vision costs for yourself and your dependents covered under the Silver option.

Qualified expenses for the Dental and Vision FSA only include dental and vision costs for yourself and your covered dependents.

Smart considerations

As you can see, the accounts are a lot alike but are very different, too.
Keep these options in mind as you plan ahead for your healthcare needs.
Don’t let the opportunity to save pretax money pass you by!