Even though the year isn’t quite over yet, most of us are beginning to look back on the past year and start preparing for the next. One thing that’s difficult to prepare for, year after year, is a health emergency. There are ways, however, that you can set yourself up to be in the best financial position possible, should one happen. And for some, that means opening a Health Savings Account (HSA) in Wisconsin.
A Health Savings Account is…
Like it’s name implies, an HSA is a special savings account for medical expenses. And like a 401(k) or IRA, an HSA is made up of pre-tax dollars that earn interest. Unlike other similar accounts, however, you can roll funds over year after year, which allows you the option to pay for expenses right away, a little down the road, or even during retirement.
To qualify for an HSA you must…
In order to open a Wisconsin Health Savings Account, you must first participate in a High Deductible Health Plan (HDHP), which is a plan that has lower premiums and higher deductibles than traditional health plans. You also must not be covered by another health plan, be eligible to be claimed as a dependent on another person’s tax return, or entitled to Medicare benefits.
If your partner has a health insurance policy through his or her employer, you are eligible for an HSA, as long as they don’t participate in an Flexible Spending Account (FSA) and you’re otherwise qualified.
If you’ve received medical benefits through the Department of Veterans Affairs anytime within the previous three month period, you may not contribute to an HSA. However, eligibility for Veterans Affairs benefits doesn’t disqualify you from having an HSA.
Some benefits of Wisconsin Health Savings Accounts are…
- Any money in your HSA that you don’t use stays in your account, year after year, and earns tax-free interest
- You can deduct contributions to your HSA from your taxes, or have them taken directly from your paycheck before taxes are taken out.
- You don’t have to set up your HSA with your health insurance company
- If you and your partner have family coverage, you can both open an HSA
- You can take your HSA with you if you switch jobs, because it doesn’t belong to your employer
- Your employer can, however, make contributions to your HSA
- In fact, anyone can make a contribution to your HSA on your behalf.
- Dental services, doctor visits, eye care services, prescriptions and other medical expenses are covered with an HSA.
- You can use your HSA to pay for the medical expenses of your partner or dependents without a tax penalty.
Some things to consider…
Having a Health Savings Account can save you money on your medical expenses, but only if you figure out how to properly budget for it. An HSA may not be the right choice for you if you have an enduring illness, or if you often acquire medical bills you can’t pay for.
Deciding on an HSA provider depends on how you’re going to use it. It’s a good idea to compare each provider’s monthly and overdraft fees, and whether or not they offer ATM access, a debit card, etc.
If you’re going to use your HSA frequently–if you want to pay for your expenses right away–you want to choose a provider that offers convenience. If you’re going to use your HSA to save money for retirement medical needs, choose a provider that offers investment options. Either way you’ll have to keep track of your HSA’s contribution limits, which the IRS sets each year.
To start an HSA with Dane County Credit Union…
To start an HSA with Dane County Credit Union, first check with your health plan administrator to make sure you’re eligible. You can also find answers and information as to what specific medical expenses can be paid for with an HSA at our Account Toolkit or at the IRS’ website. Then, of course, you’ll want to view our current HSA rates, to see if we’re the best provider for you.
Current DCCU members can start an HSA by logging into eBanking and clicking the “Self Service” tab. Under “Member Requests” you’ll see a “Open Additional Accounts” link or, stop in at any Dane County Credit Union Branch. Non-members who are eligible for membership can open their account online.
If you’re curious to learn more about opening a Health Savings Account, we’re more than happy to sit down and chat about it; at Dane County Credit Union, we care about our members–which means we care about the health of our members. And if an HSA is the best way for you to cover your medical expenses, we want to make sure you’ve got access to a great one.