A health savings account (HSA) is a personal savings account used to pay for medical, dental, vision, and other qualified expenses pre-tax. Below are five ways you can maximize your HSA to make it work for your healthcare.
When possible, make contributions through payroll deduction. Doing so gives you instant tax savings as contributions are made first, before Federal and State taxes are applied to your income. Contributions also go in FICA tax-free, saving you an additional 7.65%. (If you weren't sure, FICA = Social Security and Medicare taxes.)
Maximize your HSA contributions each year. Once the tax deadline has passed, you can’t go back and realize that savings. Those who are ages 55+, can contribute an additional $1,000 annually.
Consider investing* in your HSA for long-term growth. A good rule of thumb is to keep at least your HDHP deductible or out-of-pocket max on the deposit side. Anything above those amounts could be invested for a potential higher rate of return. HSAs are powerful tools toward saving for retirement healthcare expenses. No other account offers triple tax savings — i.e., money goes in tax-free, interest grows tax-free. and withdrawals are tax-free.
Be a smart healthcare consumer. Make your HSA dollars work harder for you by comparison shopping for medical, dental, and vision needs. Check out procedure prices and facility ratings on www.healthcarebluebook.com. Getting a prescription? Ask for samples and generics. Look for coupons.
Think of it as a rainy day fund for healthcare. There is no time limit on reimbursing yourself from your HSA. Pay out of pocket for current necessary eligible medical, dental, and vision expenses and reimburse yourself years later, if needed. Funds roll over from year to year, so let your funds gain interest and reimburse yourself when you need to.
If you’re still not sure how to make the most of your HSA funds, remember that the Omnify team is devoted 100% to benefits administration and nothing else. We’re available to help answer questions, solve problems, and help you make the most of your money.
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