In seeking out ways of mitigating your financial hardship during the COVID-19 crisis, you may benefit from your health savings account. A HSA or Health Savings Account is a savings plan that allows some of your income to be used tax-free for eligible healthcare expenses. The savings come in handy in meeting a large amount of out-of-pocket expenses while helping to lower your tax bill by reducing your taxable income. There is a limit of how much you may contribute to a HSA, and this is determined annually. However, HSAs are only available to those who have health care plans with high deductibles.
To meet the financial challenges presented to you due to this unprecedented crisis, you can make use of your HSA to mitigate some of these financial hardships, says Jared J Davis Sandusky, Ohio.
Let’s explore how you can use an HSA to address immediate financial concerns you may be dealing with due to the high cost of medical care.
Jared Jeffrey Davis Sandusky, Ohio advises on how you can qualify for a HSA
If you have a health plan with high deductibles, you may be eligible for a HSA. For individuals, the deductible is $1,400, and for families, it is $2,800. Individual policy holders can contribute a maximum of $3,550 a year, and those with family plans may contribute up to $7,100. The limit has recently gone up for existing plan holders due to changes in legislation. The extent to which you may benefit from a HSA varies, and depends on your unique circumstances. Those who have been laid off or furloughed can use HSA funds for paying health insurance premiums, including COBRA, a plan that allows those who have been laid off or furloughed to retain their previous health coverage.
During these uncertain times, many people look for liquidity and more cash in hand, and if you have saved money in your HSA fund, now is the time to use it for qualifying medical expenses without tapping into your emergency saving. If possible, continue putting money into the fund, which may be particularly valuable during a health crisis such as the current pandemic.
How to use a HSA fund
HSA funds are for healthcare expenses, including standard medical expenditures like coinsurance, co-pays, deductibles vaccines, prescriptions, and items related to emergency preparedness. Additionally, those who have high deductible plans need not pay for the testing and treating of the coronavirus until they reach their deductible. The costs remain covered under the plan without it losing its high-deductible status.
HSA plans are also available for remote healthcare services like telehealth, purchasing OTC (over the counter) medicines, and feminine hygiene products. It covers the purchase of batteries for medical devices, thermometers, cold and allergy medicines, prescription glasses, and first-aid items like gloves, wipes, bandages, and vaccines.
Besides helping you with cash during the COVID-19 crisis, a HSA is an excellent long-term investment in order to take care of your healthcare costs after retirement. Treat your HSA like your 401(k) where you put your pre-tax money, enjoy tax advantages, and save for the future.
