A health savings account (HSA) can be a practical part of your comprehensive money management strategy. HSAs provide a secure place to keep pre-tax money and let it grow tax-free. You can later use the cash in your HSA account for qualified health care expenses.
In addition to helping you save on medical costs, investing in an HSA can also benefit your finances in other ways. This article will provide an easy-to-understand overview of HSAs and why HSA contributions are worth incorporating into your budget or conscious spending plan. Finally, we give you an overview of your options in selecting an HSA.
An HSA is a type of savings account where you can contribute money on a pre-tax basis, which you can subsequently use to pay for approved health care expenses. By spending pre-tax dollars from your HSA, you can ultimately save money on expenses like coinsurance, insurance copayments, and deductibles, reducing your overall medical bills.
However, to be eligible for an HSA, you must have a High Deductible Health Plan (HDHP). If you’re unsure whether your health plan qualifies, though, give your insurance provider a call. They’ll be able to tell you whether you have an HDHP and if you can pair an HSA with your account.
If you buy a health plan on the Health Insurance Marketplace, make sure to confirm that it’s labeled as HSA-eligible. HDHP plans usually only cover preventive care before the deductible. For 2022, the minimum deductible is $1,400 for individuals and $2,800 for families.
When you contribute to an HSA, you have the chance to invest pre-tax dollars. This money can grow in your HSA without getting taxed, remaining in your account until you’re ready to use it for qualified medical expenses. 
Essentially, it acts like a checking account and you’ll get a debit card you can use for those qualified medical expenses. The HSA money in the account balance then rolls over each year if it’s not spent and can earn interest, which also isn’t taxed. While there are annual contribution limits, they tend to be high: For 2022, individuals can put in up to $3,650 and families can put in up to $7,300. 
The most obvious advantage of an HSA plan is that it can save you money on health care, which can be notoriously pricey in the United States. HSAs have financial advantages, too, including:
Ideally, you’ll be able to qualify for HSA enrollment via your employer. That said, you can still leverage an HSA if you’re self-employed or a business owner. Regardless of your situation, there are a few things to consider when selecting an HSA, including:
Finally, consider customer service for the HSAs when shopping around. You should be able to assess this via interactions when doing research. For example, if you try to get a full schedule of fees, how long does it take to get a response? 
There is no one-size-fits-all HSA that’s perfect for everybody. For instance, a single person’s HSA needs may differ from a family’s. The great news is that there is a wide diversity of HSA options to suit different needs. Here’s a quick overview of the best health savings accounts.
Lively has a noteworthy fee schedule and doesn’t ever charge for essentials like opening or closing accounts, transferring funds, or account maintenance fees. There’s no minimum balance required either. You also have the option to open a brokerage account with TD Ameritrade if you want to invest your HSA funds — no fees necessary.
Further earns points for versatility, with three types of accounts: Premium, Value, and Select. This allows families to choose the option that fits their needs. Prices vary, with Further Value being the most cost-efficient (low fees of $1 per month). Further’s Learning Center creates transparency and makes it easy to discover HSA options.
Fidelity offers varied HSA investment options, including bonds, ETFs, CDs, mutual funds, stocks, and more. You can manage your investments yourself or select a managed account. Fidelity also stands out for its low fees and accessibility. You can easily access your account via a mobile app or web platform.
If you don’t want to stress about a minimum balance, HSA Bank is an option. However, there are other fees, such as for paper statements. HSA Bank also offers percentage-based investment fees. You can invest via TD Ameritrade or Devenir. Additionally, they offer flexible spending accounts (FSAs).
The Fidelity HSA offers a good balance of security, transparency, and accessibility. There are no fees for basics like opening an account, overdrafts, or stopping payment. You can easily access your account via an online platform or mobile app. Plus, Fidelity’s deposits are FDIC-insured.
Fidelity also earns points for its comprehensive investment accounts. You can choose from a managed fund or handle your own investments. Additionally, U.S. ETF and stock trades are commission-free. You can also purchase fractional shares, giving you access to companies with pricier stock.
Investing in a health savings account and leveraging the tax advantages is just one of the many ways you can make your money work for you. But just how much should you invest in an HSA? Drafting a conscious spending plan that’s tailored to your unique needs can help you figure it out.
Following this principle, you build a budget that isn’t about restriction but that lets you live a rich life with guilt-free spending on things you truly love. Find out more about how it works with the I Will Teach You to Be Rich six-week program. Get the knowledge you need to take the first step toward improved personal finances by downloading the first chapter of I Will Teach You To Be Rich for free below!
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