Health Savings Account (HSA)

Demystifying Health Savings Accounts (HSAs)

People who have Health Savings Accounts love them. They enjoy the lowered premiums. They especially like the ability to fund their own healthcare with pre-tax dollars. Instead of paying the insurance company high monthly premiums for benefits you might not use, you can use these funds to create your own savings account.

Unlike cafeteria/flex plans, the dollars you put into your HSA continue to grow and grow, year after year. Even better, these funds can be used for popular things which most health plans currently do not cover such as alternative care, acupuncture, chiropractic care, naturopathic, dental, vision etc. This is why HSAs are so popular.

What Is a Health Savings Account (HSA)?

A Health Savings Account (HSA) is a tax-advantaged account created for or by individuals covered under high-deductible health plans (HDHPs) to save for qualified medical expenses. Contributions are made into the account by the individual and are limited to a maximum amount each year. The contributions are invested over time and can be used to pay for qualified medical expenses, such as medical, dental, and vision care, as well as prescription drugs.

Remember you must have an HSA qualified health plan to put money away in your Health Savings Account.

HSA Overview

A Health Savings Account is a tax-advantaged account to help people save for medical expenses that are not reimbursed by high-deductible HSA qualified health plans.

No tax is levied on contributions to an HSA, on the HSA’s earnings, or on distributions used to pay for qualified medical expenses.

Contribution maximums are set by the IRS and usually go up each year.

Unused account balances are carried forward each year and can be used at retirement, similar to an IRA.

HSA Benefits include:

Known as the “Super IRA”

Low premiums

Like a cafeteria plan except funds roll over; money grows year after year!

Can be used for Alternative, Naturopathic, Chiropractic & Dental

Oregon residents can pay for qualified medical expenses with pre-tax dollars and save for retirement on a tax-deferred basis.

Smart Health works with Oregon insurance providers that offer health plans compatible with an HSA. Compare HSA-compatible health plans in Oregon and select the plan that works best for you and your family.

Advantages of a Health Savings Account

You may save money in the short and long term by:

Deducting 100% of your HSA contributions from your taxable income

Having the money in your HSA accrue interest and/or gains on a tax-free basis

Paying no penalties or taxes when you use your HSA to pay for qualified medical expenses

Having a high-deductible HSA-compatible health insurance plan, which typically has a lower premium than a plan with a lower deductible

Common IRS-Qualified Medical Expenses

Acupuncture

Ambulance

Artificial limbs

Artificial teeth*

Birth control treatment

Blood sugar test kits for diabetics

Breast pumps and lactation supplies

Chiropractor

Contact lenses and solutions*

Crutches

Dental treatments (including X-rays, cleanings, fillings, sealants, braces and tooth removals*)

Doctor’s office visits and co-pays

Drug addiction treatment

Drug prescriptions

Eyeglasses (Rx and reading)*

Fluoride treatments*

Feminine hygiene products

Fertility enhancement (including in-vitro fertilization)

Flu shots

Guide dogs

Hearing aids and batteries

Infertility treatment

Inpatient alcoholism treatment

Contact lenses and solutions*

Insulin

Laboratory fees

Laser eye surgery*

Medical alert bracelet

Medical records charges

Midwife

Occlusal guards to prevent teeth grinding

Orthodontics*

Orthotic Inserts (custom or off the shelf)

Over-the-counter medicines and drugs (see more information below)

Personal protective equipment (PPE) like masks and hand sanitize

Physical therapy

Special education services for learning disabilities (recommended by a doctor)

Speech therapy

Stop-smoking programs (including nicotine gum or patches, if prescribed)

Surgery, excluding cosmetic surgery

Dental treatments (including X-rays, cleanings, fillings, sealants, braces and tooth removals*)

Vaccines

Vasectomy

Vision exam*

Walker, cane

Common Over-the-Counter (OTC) Medicines

Examples include, but are not limited to:

Acne medicine

Aids for indigestion

Anti-diarrheal medicine

Baby rash ointment

Cold and flu medicine

Eye drops*

Feminine antifungal or anti-itch products

Hemorrhoid treatment

Laxatives or stool softeners

Lice treatments

Motion sickness medicines

Nasal sprays or drops

Ointments for cuts, burns or rashes

Pain relievers, such as aspirin or ibuprofen

Sleep aids

Stomach remedies

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