Before we answer the question, “who should have a health savings account?” , this matter of health insurance needs to be clearly understood by one and all. Health care today is one of the most important expense items in every individual’s payouts next only to mortgage payments.
US Treasury Department has defined HSA in simple words. HSA is a special account where in individuals can provide for current medical expenses while at the same time save for future medical expenses. In other words HSA is a savings account as opposed to traditional health insurance. This account enables you to pay for your current medical expenses and future post retirement health expenses on tax free basis.
HSA can be opted for only in conjunction with HDHP –High Deductible Health Plan, which is an insurance scheme that does not cover first dollar medical expenses. HDHP premiums are much lesser than normal health coverage which enables you to save the rest of the difference amount into HSA.
The major advantage of this account is that the control over the funds in your hands and not dependant upon any third party insurer. The choice of investment lies with you.
To be eligible to open account under this scheme, not only you should have an HDHP plan, the deductible has to be a min. Of $2,200 on your coverage for family and in case of individual the deductible should be a min of $1,100 for self. HDHPs will have the first dollar coverage which means no deductibles are admissible for preventive care and they also charge higher limits for non network or third party services.
Since this is a savings account, you can open an HSA account in your bank or insurance company and many other institutions who offer the scheme.
If you have recognized the importance of the proposed health cum saving plan, that answers your question. Each and everyone should opt for the said plan. You can save money and save on the taxes also. HDHP being an inexpensive plan, it works very well as a cover of insurance which can offer you the cover beyond the amount you have saved up in the bank. Such Account does attract some small service fee like any other bank account. This should not be the least of your worries.
There are many more advantages of HSA account. This scheme does not have a pre-qualification of any income limit to be able to contribute. HSA does not stipulate that you need to have earned an income to be able to contribute to this account. You can have one account while your spouse can also have another independent account. Only children are not allowed to create their own HSA account.