DEFINITION OF THE DAY
Health Savings Accounts (HSA): A pre-tax savings account for medical expenses that comes with a high-deductible (translation: you pay a lot out of pocket) health insurance plan.
Did you know that your benefits cost 50% of your salary, on average? Why not get the most out of your benefits, starting with the HSA. The HSA is, in our humble opinion, one of the most undervalued benefits out there. Here are three reasons you should pay attention to your HSA:
1. Your money goes in pre-tax, so you get to keep more of your paycheck to put towards expenses. Many employers will also put money in your HSA, or match your contribution, so it's worth asking your employer if they contribute.
2. “But what,” (you might ask) “if I’m healthy as a horse and never spend the money?” No fear, horse people. You get to keep that money when you leave your job, and you can even transfer it to your retirement account. “Any catch?” Neigh.
3. If you’re young and don’t have many medical expenses, you can choose a cheaper health insurance plan and contribute to an HSA. If you have medical expenses, the HSA will be there. If you don’t, the money is available to you instead of sitting in the pockets of your insurance company.
***Word to the wise: An FSA, or Flexible Spending Account, sounds similar, but it’s more limited. It can be useful too, BUT if you don’t spend the money within the year, you lose it. Make sure you clarify which accounts your employer offers.***
*This section is not sponsored by any third parties. These are our pure, honest opinions of what we think is easy and works best!*
This week, our task for you is easy. If you are currently employed, take a minute to look into your HSA and ask yourself (or your benefits team) a few questions. Does your insurance plan come with an HSA? Does your employer offer a match? How much are you contributing towards your HSA? With that information in hand, you’ll be better prepared to pick your benefits package when it’s time to re-enroll. For our job seekers out there, make sure you ask your employer these questions when you (hopefully!) see that offer letter. We're rooting for you!