A Crash Course on Health Savings Accounts

Personal Finance | 01.17.2024
Health savings accounts (HSAs) help with high healthcare costs for individuals and families, easing the financial burden. These accounts help save money for medical expenses and may provide a tax-advantaged solution for managing healthcare costs. If you're new to HSAs, we will cover everything you need to know about HSAs and the benefits to help your financial future.

Unpacking the Health Savings Account 

Think of an HSA as your personal healthcare piggy bank, accessible to those enrolled in higher-deductible health plans. With an HSA, you’ll have complete control over the funds. Unlike other accounts, the money won’t vanish at the end of the year. 

As you make deposits into your HSA, the funds will continue to grow annually, remaining untouched until you are ready to tap into it. There is no rush and no pressure; your funds are always at your disposal, whether for an immediate medical necessity or a future healthcare need.

Key Features of the Health Savings Account

Firstly, your HSA contributions come with the advantage of being tax-deductible, effectively reducing your taxable income. At the same time, withdrawals remain untaxed, granted they are utilized for qualified medical expenses. Keep in mind that it’s always a good idea to consult your tax advisor for advise specific to your situation.

A standout characteristic of HSAs lies in their remarkable portability. If your employment status changes, you switch jobs, or your medical coverage changes, your HSA will stay with you.

Adding to its uniqueness is the flexibility of the HSA. Annually, the IRS establishes a maximum limit for contributions, and what makes it even more appealing is that anyone, including your employer and family members, is able to contribute to your HSA. This collaborative contribution model opens the door for faster growth than you might anticipate.

Lastly, when you hit the age of 65, your HSA will undergo a transformation into a retirement account. This means that non-medical withdrawals become permissible without incurring penalties, although they will be subject to taxation as income.

Opening a Health Savings Account at Merchants Bank 

Are you ready to open a Health Savings Account at Merchants? You're just a few steps away! First, confirm your eligibility and see if you meet the qualifications of an HSA. Ensure you are enrolled in a high-deductible health plan (HDHP), are not enrolled in Medicare, and are not claimed as a dependent on another’s tax return. If you’re not sure what kind of health plan you have, your employer is a great resource.

Next, gather your essential information. Like any other account opening process, you'll need your social security number, employment details, and other personal information on hand. Merchants Bank makes it easy and quick to apply. Simply, use the ‘Apply Now’ button and select 'Health Savings Account' from the list, and you're on your way. 

HSAs are a great financial tool that may help to manage healthcare costs—they represent a strategic approach to building a secure and flexible financial future. If you're ready to take the next step in securing your financial well-being, consider opening a Health Savings Account at Merchants Bank.
Don't worry about getting lost; we've got you covered. Our dedicated team of financial advisors is ready to assist you and answer any questions you may have along the way. Take control of your healthcare finances and embark on a path toward financial freedom with the strategic benefits of a Health Savings Account today.

To learn more about an HSA with Merchants Bank, click here.

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