Health Savings Accounts (HSA)
Some people want to have more control over their money, especially how it is used towards medical expenses.
With a group health savings account (HSA), you can take advantage of a plan offered through a group health insurance plan to have your own HSA.
What is a Group Health Savings Accounts?
A Group HSA, also known as a Group Health Savings Account, is a type of insurance policy that allows policy holders to contribute up to a certain amount of pre-tax income into the account to cover expenses related to medical costs.
It acts similar to a regular savings account in that cash amounts are contributed to it and then withdrawn under certain circumstances. The Group HSA does not have a deductible or a set premium.
In fact, it can only be combined with a HDHP, also known as a High Deductible Health Plan. These types of health plans have a high deductible and do not cover anything other than preventative services after the deductible.
This means that you cannot have an HSA if you have a plan such as a catastrophe health plan.
Since Group Health Savings Accounts use pre-tax dollars as their contributions, they allow users to save money and potentially put more money into them. Naturally, they have limitations, restrictions, and specific qualities in different policies that users must follow.
What Does a Group Health Savings Accounts Cover?
Group Health Savings Accounts (or HSAs for short) cover a wide range of medical costs.
These kinds of plans are able to cover medical expenses such as co-pays, deductibles, prescription costs, and more. If you need a new pair of glasses, you will be able to use your Health Savings Plan to cover the cost of them.
In addition, if you need a medical device such as a hearing aid or blood sugar reader, you will be able to use funds from the HSA to purchase it.
Essentially, the HSA covers anything related to medical expenses, from transportation to medical procedures to transplants to x-rays and everything in between.
What does it NOT cover?
A Health Savings Account does not cover non-medical expenses. This means that they will not be able to cover childcare or housing costs related to medical procedures or medical care.
They also cannot cover cosmetic things such as non-prescription fashion glasses or supplements that have not been prescribed.
Additionally, users who want to contribute more than their maximum pre-tax contribution will not be able to increase the funds in the account to cover more than the set amount. Non-health related expenses need reported as taxable income to the IRS.
What are the limitations?
The limitations of the HSA include not paying for certain types of expenses and not being able to contribute more than the amount of pre-tax income set by the IRS.
The limitations of an HSA mostly consist on what policy holders can use the funds to purchase. These are, understandably, limited to medical expenses and expenses related to returning the user to health.