Pay For Medical Expenses Pre-Tax With Health Savings Accounts
Health savings accounts were rolled out in 2003.
Their purpose was to encourage insureds to assume more everyday medical risk and reward them with tax advantages for doing so.
There are two things you need to do, in order to be able to pay for your medical expenses with pre-tax money.
The Qualified High Deductible Health Plan In order to pay for your medical expenses pre-tax with a health savings account, you must have a qualified high deductible health plan (QHDHP).
These are specific health insurance plans that were meant to be partnered with health savings accounts.
They have high deductibles ranging from approximately $1,500 to $5,000 per person per year, or $3,000 to $10,000 per family, per year.
They often cover preventive care (a physical) before the deductible, but everything else is your responsibility, until you reach your deductible.
That's when the coverage kicks in.
The big advantage of QHDHP's is that they are very inexpensive compared to traditional "full coverage" plans.
The Health Savings Account (or HSA) An HSA is the financial account that allows you to pay for medical expenses pre-tax.
The high deductible health plan qualifies you to open the financial account, which you can do through your insurance company's preferred banking partner, or at your local bank or credit union.
You can deposit money into your HSA to pay for medical, dental, vision, and other expenses if and when they arise.
A health savings account partnered with a QHDHP is the most powerful solution to high healthcare costs.
Their purpose was to encourage insureds to assume more everyday medical risk and reward them with tax advantages for doing so.
There are two things you need to do, in order to be able to pay for your medical expenses with pre-tax money.
The Qualified High Deductible Health Plan In order to pay for your medical expenses pre-tax with a health savings account, you must have a qualified high deductible health plan (QHDHP).
These are specific health insurance plans that were meant to be partnered with health savings accounts.
They have high deductibles ranging from approximately $1,500 to $5,000 per person per year, or $3,000 to $10,000 per family, per year.
They often cover preventive care (a physical) before the deductible, but everything else is your responsibility, until you reach your deductible.
That's when the coverage kicks in.
The big advantage of QHDHP's is that they are very inexpensive compared to traditional "full coverage" plans.
The Health Savings Account (or HSA) An HSA is the financial account that allows you to pay for medical expenses pre-tax.
The high deductible health plan qualifies you to open the financial account, which you can do through your insurance company's preferred banking partner, or at your local bank or credit union.
You can deposit money into your HSA to pay for medical, dental, vision, and other expenses if and when they arise.
A health savings account partnered with a QHDHP is the most powerful solution to high healthcare costs.
