23 Apr Using a Health Savings Account (HSA)
People could enroll into High Deductible Health Plans (HDHP) for cheaper premiums, but higher deductibles (Caldwell and Cautero 2019). People who “are healthy, don’t visit the doctor often, or don’t have a large family,” and “have a lot of liquid savings” can benefit from HDHP’s features (Caldwell and Cautero 2019). With eligible HDHPs, people can even apply for a Health Savings Account (HSA) (“Using Your HSA to Pay for Dental Expenses” 2018). People can utilize this account in many ways, including paying for their medical and dental treatments.
HSAs come with their own benefits and caveats. People use the money in their HSA “to pay for medical expenses,” and fortunately, this money is not “taxed, and any interest they accrued is tax-deferred” (“Using Your HSA to Pay for Dental Expenses” 2018). Money in the HSA can also go towards “deductible expenses, as well as copays and some other health care expenses that are determined by the individual HSA” (Mayo Clinic Staff 2019). Every year, individuals and families can deposit a set amount of cash into their HSAs—for instance, individuals can deposit $3,500, while families can deposit $7,000 (Mayo Clinic Staff 2019). Their employers can also choose to deposit money into their HSA, “[b]ut the total of your [their] employer’s contributions plus your [their] contribution still must be within the contribution limits” (Mayo Clinic Staff 2019). Individuals and families can also keep the money in their HSAs after leaving their jobs (Mayo Clinic Staff 2019). However, only those below the age of 65 can open an HSA (Mayo Clinic Staff 2019). Once they turn 65, they cannot deposit money into their account anymore, but they can still spend the leftover money “for medical expenses” (Hartman 2018).
People can spend funds in their HSA toward medical and dental treatments. People can use money from their HSA for “expenses that may not be covered by health insurance at all, like laser eye surgery, guide dogs or fertility treatments” (“Why Most People with High-Deductible Health Plans Can’t Get a Health Savings Account (HSA)”). Some dental treatments and services can also be considered qualified expenses by HSAs, such as fillings, root canals, extractions, crowns, dentures, bonding, cleanings, check-ups, etc. (Naylor 2018). Though, people should verify whether a dental procedure is considered a qualified expense because “the IRS may modify its list of eligible expenses from time to time” (“Qualified Medical Expenses” 2016). When people use money from their HSA to pay for any service not considered a qualified expense, people under 65 would “have to pay income taxes on the money and an additional 20 percent penalty,” and those over 65 would have to just “pay taxes on the money” (Mayo Clinic Staff 2019).
Like insurance policies, HSAs contains pros and cons that people should consider before applying for one. HSAs represent another way people can pay for their medical and dental procedures.