ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

What Is A Health Savings Account HSA

Updated on May 6, 2010

What Is A HSA?

Health Care Savings Accounts, or HSAs, are recent development in the health insurance reform movement. Unlike current health care reform efforts in Congress, HSA accounts are already in place and can be used by taxpayers now to increase tax deductions, save money on health insurance, and provide a health insurance option for small business owners.

An HSA works very much like a 401(k) account, or an IRA account. Money deposited into the HSA is tax deductible in most cases. Money inside of the HSA grows without any taxes on capital gains, taxes on interest, or taxes on dividends. If the money in an HSA account is withdrawn to pay for qualified medical expenses, then all withdrawals are made tax-free. This makes an HSA a powerful tax trick to save money.

HSA Account Save Money On Taxes and Save Money On Health Insurance

In order to open a Health Savings Account you have to meet certain qualifications. To qualify to open a HSA account, you must either have no health insurance, or have only a high deductible health policy, or HDHP, in force.

You do not qualify to open an HSA if you are on Medicare, or if someone claimed you as a dependent on their Federal Income Tax Return.

Once a high deductible health insurance policy is in force, a HSA account can be opened. The HSA account is administered by an independent third-party. In other words, no health insurance company provides HSA accounts associated with their health insurance. However, certain companies may offer HSA accounts through a subsidiary or other affiliated company.

The idea is that since the money in the HSA account is independent of the health insurance company, the health insurance provider cannot link services to your HSA account by charging you more or less based on how much money you have in your HSA.

There are many types of HSA accounts. Banks, credit unions, stock brokerages, and independent companies all offer HSA accounts. The money inside of HSA accounts can be invested in any number of financial instruments, much like a 401k or IRA account. Brokerages may offer mutual fund investment options, or may have something like a self-directed IRA where you can invest HSAs in stocks, bonds, or other securities of your choosing.

Meanwhile many banks offer money market accounts, CDs, and other safe investments for HSA account holders. However, some banks will also offer mutual funds or other registered investments if asked, often through an affiliated broker/dealer that works in the bank or credit union.

Do be sure to check out all fees and charges, as well as any commissions on HSA accounts. There can be a lot of variation in such expenses with one bank offering free HSA accounts to customers and another bank charging $50 per year as an annual fee HSA.

Comments

    0 of 8192 characters used
    Post Comment

    No comments yet.

    working

    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, hubpages.com uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at: https://hubpages.com/privacy-policy#gdpr

    Show Details
    Necessary
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the googleapis.com or gstatic.com domains, for performance and efficiency reasons. (Privacy Policy)
    Features
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Marketing
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Statistics
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)