How Do You Start A Health Care Savings Account?

By Cathy Wilson Posted in Health Insurance News



An HSA, or Health Savings Account, is relatively new method to pay for medical expenses. Funds for qualified medical expenses are held in a tax-free trust and may earn interest. Not only does as HSA earn interest, all qualified medical expenses paid from an HSA are tax deductible.

Starting An HSA

Phone your local bank or credit union. Many financial institutions have structures in-place for HSA accounts. Next, enroll in an HSA-compatible plan. Many HSA plans carry a high deductible but have significant advantages to offset deductibles. The deductible can be subsidized by the savings an HSA provides because there are no out-of-pocket co-pays, and qualified medical expenses are tax deductible. Plus, individuals enjoy accruing interest in their HSA’s investment trust.

After joining an HSA-compatible insurance plan, fill out the necessary forms and return the completed documents to the HSA administrator for processing. In many cases, forms may be completed and submitted via the HSA administrator’s website while others may require mailing or faxing completed documents.

Once the required forms are processed, pay the initial fees. These fees vary, but typically are about $25 (some HSA administrators will waive this particular fee). Along with the initial fee will be an opening deposit into your new HSA investment trust. Starting deposits can range from $5 to $100 or even more. Most HSA plans do carry a nominal monthly fee or may have an annual fee. Monthly fees are typically under $4 and annual fees average $40.

Benefits Of An HSA

Health savings accounts not only provide access to pay for qualified medical expenses, they allow you to chose your provider and because payments are made by check or debit card, most medial professionals offer discounts for direct payment.

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  4. What Are Archer Medical Savings Accounts For A Health Insurance Policy?
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