Using an HSA saves you ~30% on purchases
It's possible you can save on monthly costs and save in your HSA
Save on insurance in the long run
How To Save 30%
When you use your HSA to pay for copays, medications, visits, etc you save approximately 30% on the cost.
You automatically save ~30% because you didn't pay taxes on the money in your HSA.
What's in your pocket?
Example WITHOUT an HSA
Example with an HSA
Save Each Month
One of the requirements of having a Health Savings Account is that you must have a high deductible insurance plan.
What does this mean to me? Well, typically a high deductible insurance plan is a little different.
Because of those 3 reasons, you will want an HSA to help pay for it.
My strategy is based on my lifestyle. Specifically, I rarely use my insurance except for a yearly visit to the doctor and visits to the dentist. So, my expense are pretty low.
Therefore, I don't want to pay a lot of money each month for something I don't use. Right!
Here is an example
What does this do? Well, my plan 🙂
Real World Prices
What if you put those extra costs back into your pocket????
Note the differences in costs!? The next closest insurance is almost $200 more. Imagine keeping $200.
Long Term Savings
If you're consistent with it and don't spend a lot of money on out of pocket expenses, this is what will happen.
Did you know your HSA has a built-in investment account and can be used like a 401(k) for health care costs? Because the money in your HSA never expires, it can be a great complement to your long-term and retirement savings strategies!
I'm divorced, how can this help me?
Ok, hang with me on this one, we're going to dive deep. Let's get started.
Once the amount of child support is set, it may not change unless the courts update it.
In my state, if you pay the health insurance for the kids, it will adjust the amount of child support. If you pay insurance, you get a break on child support.
You may have to split out of pocket expenses. For example, 50/50 for a doctor's copay.
How this helps…
Don’t Forget Your HSA During Open Enrollment
As Open Enrollment and year-end approaches, consider what you spend each year on prescriptions, glasses, and doctor office co-pays for yourself and your family. Commit to setting aside enough savings in your HSA, and consider increasing them if you can. If you have the option, set up a recurring payroll deduction and pay for these expenses with your HSA to get a tax savings.
How Much You Can Save
For every $30 extra each month you contribute towards your HSA from your payroll, your HSA balance grows faster while you could save 35%* – that’s $126 annually – on taxes.
Give yourself peace of mind. Build a health care safety net that never expires by making regular contributions to your HSA. One of the best features of an HSA is the flexibility to save now and spend whenever. With an HSA, it’s your money. Any funds you contribute but don’t use roll over for as long as you keep your account.
Maximum contribution limits are going up again in 2020 to $3,550 for individual coverage and $7,100 for families! Since you can use your funds on qualified expenses at any time, your HSA is a great tool for long-term saving.
If you are going through open enrollment soon – or just want to plan for next year – be sure to commit to even more HSA savings in 2020!
From the IRS: “… a child of parents that are divorced, separated, or living apart for the last 6 months of the calendar year is treated as the dependent of both parents whether or not the custodial parent releases the claim to the child’s exemption.“
JUST make sure one of you is claiming this child as a dependent, so you can use tax-free HSA funds for medical expenses.
I had to call my HSA company to find out. They said because in my insurance, it's listed as a single, I have to use the single maximum amount. I'd have to change my insurance to a family plan for my HSA to raise the maximum contribution amount.
In cases of divorce, an HSA can be transferred between spouses without taxation. This is not considered a taxable distribution. All HSA rules regarding continued tax-free status, contributions and distributions apply.
First, your ex has to have an HSA to receive the money. They don't have to have an HSA eligible insurance plan. Note, they will have to have an eligible insurance plan if they want to contribute more.
If you do it this way, it's all tax-free.
For every $30 extra each month you contribute towards your HSA from your payroll, your HSA balance grows faster while you could save approximately 35% – that’s about $126 each year in taxes.
Build a health care safety net that never expires by making regular contributions. One of the best features is the flexibility to save now and spend it whenever you want.
No. Definitely check to see if you can get a Dependent Care FSA through your company. Think about it, if you do, this is a possible 30% discount on your child care costs. That's huge!