With these tips and insights, you can reap the most benefit from your health savings account.
Familiarize yourself: Make sure you know how to check your balance and use the money toward your next prescription refill or doctor visit. If you’re unsure, your employer’s human resources department can help you.
Use it: Money in a health savings account can help you pay out-of-pocket costs for a doctor’s visit, hospital stay and prescription drugs. It can also be used for other qualified medical expenses related to dental and vision. What many don’t realize, though, is health savings account funds can be used for your family’s well-being.
Keep it: The upside of health savings accounts is that you don’t “use it or lose it.” If you don’t spend it, you can keep it. Even if you change jobs, move or get married, your health savings account goes with you.
Triple tax savings: First, each contribution — which can be withdrawn from the paycheck and deposited into the health savings account — is pre-tax. Second, any interest earnings are also income tax-free. Finally, unlike some retirement accounts, fund withdrawals to pay for health care costs are also income tax free.
Plan for retirement: Learn about your plan’s investment options, because this is where your savings can really take off. Turning 65 unlocks more benefits, including the ability to use health savings account funds to pay for some Medicare premiums or long-term care.