Health Savings Accounts (HSAs) have emerged as a popular and effective tool to finance healthcare expenses, empowering individuals to make informed decisions about their health without worrying about the financial burdens of medical bills. HSAs allow individuals to set aside pre-tax dollars to pay for qualified medical costs, including doctor visits, prescription medications, and preventive care. With contributions to HSAs being tax-deductible, people can save money while proactively managing their healthcare needs.
Reasons to get an HSA
1.) Tax advantages – HSA contributions reduce taxable income, and investment growth is tax-free. HSAs are funded with pre-tax dollars, earn tax-free interest, and withdrawals for qualified medical expenses are tax-free.
2.) Flexible use before and after retirement – HSAs can be used for both near-term medical expenses and expenses in retirement. While an HSA isn’t specifically designed to be a retirement savings vehicle, it can do double-duty as one if you need an additional source of income. You may need to pay income tax if you are going to withdraw HSA funds for non-qualified medical expenses. Some of the expenses you might pay in retirement using HSA funds include:
- Day-to-Day living expenses, such as food and transportation costs
- Housing costs, including mortgage or rent payments and utilities
- Debt repayment for credit cards, student loans, or other debts
- Higher education expenses for a grandchild
- Travel Expenses
3.) Contributions roll over when unspent money in an HSA roll over at the end of the year, making it available for future health expenses. Pairing a high-deductible health plan (HDHP) with an HSA can reduce monthly premiums. Some of the most common costs covered by an HSA are copays, deductibles, coinsurance payments as well as dental and vision treatments, doctor’s visits, surgery, hospital care, hearing aids, prescriptions, vaccinations, and family planning. Lower premiums would be for HSA eligible plans.
Benefits of using a Core Bank HSA
- No minimum balance account option.
- Local community bank account means access and personalized service for you and your employees
- Contributions are tax-deductible, reducing the tax exposure for both employer and employee.
- We offer a streamlined way to move money from direct deposit payments directly into your HSA so that you always have money stashed away should you ever need it for routine medical care or unexpected health needs.
“Opening an HSA account with Core Bank is a smart move because you get tax benefits on contributions, growth, and withdrawals for qualified medical expenses. Plus, Core Bank’s HSA accounts let you save for the long term with funds that roll over every year, giving you flexibility for future healthcare costs,” shared Brian Lambie, Core Bank Business Center Manager.
Who is Eligible to Participate
You are eligible for an HSA account if you meet this criteria:
- Covered under an HDHP
- Not entitled to benefits under Medicare
- Not able to be claimed as a dependent on another person’s tax return
Meeting Your Health Savings Needs
You can get an HSA account by visiting one of our branches or open an account online! Get in touch with an Experience Expert today by calling 402-333-9100 to learn more.
Listen to The Core Experience as Core Bank’s Banking Center Manager, Michael Roth, discusses the importance of HSAs and how Core Bank can help you get started with this savings contribution and make informed financial decisions regarding your healthcare.
Disclosure: Core Bank does not provide tax advice. This material is for informational purposes only and is not intended to provide and or be relied on for tax advice. Talk to a tax professional before using HSA funds for non-qualified medical expenses. Please consult your tax advisor before making any tax-related decisions. Visit www.irs.gov for more information.