Tips and tricks on how to make your H.S.A. work for you
Jan 3, 2012, 9:08 a.m.
If you are enrolled in a high-deductible insurance plan, you may be eligible for a health savings account (HSA). This account allows you to contribute funds whenever you wish without having taxes deducted. Better yet, money stored up in an HSA can be rolled over at the end of the year. When used correctly, HSAs can help people save up money for future health expenses. However, if misused, health savings accounts will not provide significant savings, and may even end up costing you quite a bit of hard-earned cash. Follow these tips to make the most of your health savings account:
A lot of people assume that they can wait until they get sick and then open up a health savings account. Unfortunately, HSAs aren't like high school papers, so you can't get away with procrastinating. An HSA can only be used to pay for medical expenses after it has been established for some period of time. You're better off setting up the HSA right away and so that you'll be eligible to use it when necessary.
Set Up Automatic Deductions
When life gets busy, it can be hard to remember to keep track of health savings accounts. If this is something that you foresee as a major struggle, you may want to set up automatic deductions. It may help if you think of the savings account as you would if it was a rent check or a car payment.
Pay For Over-The-Counter Medicine
Believe it or not, you can use your health savings account to pay for aspirin, cough syrup and several other varieties of over-the-counter drugs. As long as the drugs you purchase are used to alleviate some sort of symptom, they can be paid for through your HSA. Sadly, multivitamins do not fit in this category and still must be paid for with cash.
The best way to make the most of your health savings account is to remain in good health. This may seem a bit cliche, but it also happens to be true. Eat healthy, avoid drugs and alcohol, brush your teeth and exercise, and you'll find that your medical expenses can remain at a minimum level with little extra work. Each year you save money is another year that the cash rolls over and remains available to pay for future expenses.
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