Health savings accounts (HSAs) are a great way to save for medical expenses. Thanks to their multiple tax benefits, opening an HSA is a smart financial move that can help you offset out-of-pocket costs. Whether you open one independently or get one from your employer, there are plenty of ways to use what you contribute.
Most people know you can use an HSA to pay for doctor's visits, health insurance deductibles and major procedures. But did you know that you can also buy skincare products? You can use an HSA to pay for various qualified medical expenses. That list of expenses comes from the IRS and includes everything from over-the-counter medications to menstrual products. But why skincare? Acne is considered a medical problem in the eyes of the IRS. While many view it as a cosmetic issue, acne can lead to serious health problems. Therefore, trips to the dermatologist and many acne products you can buy at your local drugstore are covered! Of course, not everything counts. To simplify things, here are a few skincare products that count as HSA qualified expenses. Acne Treatments and Cleansers Walk through the aisles of your favorite beauty store, and you'll see countless goods that target acne. From gel cleansers to full acne kits, those products help you get clear skin. Developing a solid skincare routine is easy with so many products available. If you want to use your HSA, stick to medicated cleansers and treatments. Popular acne-fighting ingredients like salicylic acid and benzoyl peroxide are good options. Take a peek at the packaging to look for those medications. If the product doesn't have medicine, it doesn't qualify for HSA coverage. You can also use your HSA for acne-targeting devices like light therapy masks or wands. Products with SPF Sun protection is important. Not only does it help you combat the signs of aging, but it protects you from serious skin damage. Because UV exposure can lead to many health problems, most products with SPF are HSA qualified expenses. Pick up your sunscreen, protective moisturizers and SPF lip balm with your HSA! Read a similar article about 2023 HSA contribution limits here at this page.
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Do you grind your teeth at night or clench your jaw so much that you wake up with headaches? If so, you might want to look into getting a mouth guard.
Mouth guards are protective mouthpieces that cover your teeth and gums. They can reduce excessive wear on your teeth and prevent many avoidable injuries. Whether you buy one of your own volition or get a recommendation from your dentist, you have many ways to pay for this expense. If you have a health savings account (HSA), you can use it to pay for your mouth guards. But what is an HSA, and how do you use it to cover the costs of your mouth guard? What is an HSA? An HSA is a unique tax-advantaged plan. To open one, you must have a high-deductible health plan and no other form of health coverage. Think of an HSA as a savings account purpose-built to manage healthcare expenses. You and your employer can contribute up to the annual limit each year. Unlike a flexible spending account (FSA), your HSA stays with you as you move jobs. Every contribution is tax-deductible. Any interest you earn is also tax-deferred, while eligible expenses are tax-free. It's a cost-effective way to manage healthcare costs while growing a nest egg you can use whenever needed. HSA Eligible Expenses An HSA will only cover qualifying medical expenses. The IRS dictates what you can use your HSA for and can't. Any amount you spend that doesn't fit under the umbrella of qualifying expenses will result in possible penalties and additional taxes. So what counts as an eligible expense? You can use your HSA on many things. The most common costs are health insurance deductibles, copays or prescription drugs. However, you can also buy over-the-counter products at your local pharmacy. HSAs even cover dental expenses. That includes mouth guards! Many standard insurance policies don't cover dental-related costs, so having an HSA is a great option to keep your dental health in good shape. Read a similar article about HSA providers here at this page. Advisors Rick and Jared Weinerman form a unique father-son partnership. I met Jared at a small dinner party where he and I were the only people not related to the other guests. Sitting across from each other, we struck up a conversation that turned out to be fortuitous. He was a young financial advisor at the beginning of his career. I was impressed by his enthusiasm and dedication to the profession read more
The Coronavirus Aid, Relief and Economic Security (CARES) Act was signed into law in 2020. Its primary goal was to address the economic fallout of the COVID-19 pandemic. However, it also impacted those with health savings accounts (HSAs). Here's how.
Over-the-Counter Medical Products One of the biggest changes brought on by the CARES Act was the inclusion of OTC medical products in the list of qualified medical expenses. Previously, you could not use an HSA to buy OTC drugs and medically necessary products. Rules from the Affordable Care Act required a prescription for eligible expenses. However, that changed with the CARES Act. It rolled back those rules, allowing you to use your HSA for everything from over-the-counter pain relievers to bandages. With the HSA tax deduction, this change provides even more ways to save. Menstrual Products In addition to over-the-counter drugs and care products, the CARES Act turns certain menstrual products into qualified expenses. You can now use your HSA to pay for tampons, pads, liners, cups and more. This change is permanent and applied retroactively to any products purchased after January 1, 2020. Telehealth Services COVID-19 saw a dramatic increase in telehealth service offerings. With quarantining rules, providers and clinics adopted telehealth technology to continue offering care to patients. But those services came with additional costs. The CARES Act changes cost-sharing rules. Before the act took effect, cost-sharing measures were typically applied after a policyholder covered their deductible. The CARES Act allows those with high-deductible health plans and an HSA to get coverage before meeting their plan's deductible. Were There Any Changes to the Tax Benefits? Fortunately, the CARES Act did not impact any tax advantages of having an HSA. These accounts come with many unique benefits. When you contribute, you can claim an HSA tax deduction. All interest is also tax-deferred, and the expenses you pay using your HSA are tax-free. These benefits remain intact, and you can continue using your HSA to save for medical expenses while reducing your taxable income and growing your wealth. Read a similar article about HSA debit card here at this page. There are many ways to save and get assistance for healthcare expenses. With the cost of medical care being so high, you can use all the help you can get! While many opt to open health savings accounts (HSAs) or get a flexible savings account (FSA) through their employer, another option exists.
A health reimbursement arrangement (HRA) is a unique alternative that could provide substantial assistance. But how does it work, and what medical services will it cover? What is an HRA? An HRA is an employer-funded benefit that many companies offer as part of compensation plans. It is not an account. Many confuse HRAs with HSAs, but they are very different. With an HRA, you are not contributing money. As a result, you can't withdraw funds. In most cases, you must have the expense first, pay it yourself and request reimbursement later. Some employers have HRA debit cards for time-of-service coverage, but many do after-the-fact reimbursement. What is an HRA, and how does it work? Essentially, your employer sets up the arrangement and determines how much it will put into the plan. They fund the arrangement, and you request reimbursement up to the set limits. Employers choose to offer this benefit for many reasons. It is an attractive benefit to get talent in the doors, and employers can also claim tax deductions for all reimbursements made through the HRA. What Medical Services Does an HRA Cover? Here's where most of the confusion about using an HRA stems. With an HSA or FSA, you have a clear list from the IRS about what constitutes a qualified medical expense. It's cut and dry, and you always know how much you have in your account to use. With an HRA, your employer dictates what the HRA will cover and how much reimbursement it provides. IRS rules determine what qualified medical and dental expenses are allowed. However, your employer can exclude certain costs. These details must be clear on HRA documents for employees. The good news is that there's ample flexibility. Sometimes, an HRA will also cover insurance premiums and expenses that other plans do not cover. Read a similar article about integrated HRA here at this page. A health savings account (HSA) can help you manage rising healthcare costs. They cover a wide range of qualifying medical expenses like doctor's visits, prescription medications and even over-the-counter care products. The IRS dictates what you can use an HSA for without tax implications. Following those guidelines to a tee can help you make the most out of your HSA savings account.
But what if you want to try a more experimental service like acupuncture? Can you use an HSA to cover it? What is Acupuncture? Acupuncture has been around for thousands of years, and it's a form of an alternative method that some healthcare providers recommend alongside other treatments. The process involves inserting sterilized needles at specific points throughout the body to stimulate the central nervous system. It's said to relieve discomfort and address symptoms for many conditions, including:
Acupuncture and HSA Eligibility You don't see acupuncture as a primary treatment in hospitals and medical offices. Typically, you must visit specialized care providers and clinics to get acupuncture. So how does this alternative treatment fall under the umbrella of qualifying expenses? Whether you can use your HSA to pay for acupuncture depends on if a medical care provider prescribes it. If you visit a clinic of your own volition without medical guidance, it likely won't be a qualified medical expense. Therefore, you can't use your HSA. If you do, you'll have to pay taxes on the distributed amount. The exception is when your doctor prescribes it. Typically, HSA providers require a few pieces of information from your medical care provider to ensure it's a qualifying expense. That includes details on the medical necessity of acupuncture, how frequently you need it and how long this treatment plan will last. If your doctor provides the prescription information, it's considered a qualifying expense. You can use your HSA savings account to pay for every session. Similar rules apply to alternative treatments like massages. Read a similar article about investing your HSA here at this page. Opening a health savings account (HSA) is a smart investment that can help you prepare for the future. These accounts specifically focus on qualified medical expenses, allowing you to save over many years to cover insurance deductibles, emergency medical procedures and even health-related products at your local pharmacy.
HSAs are tax-advantaged, and there are several rules and requirements to follow. For example, you can only contribute up to $3,850 for individual accounts and $7,750 for family accounts in 2023. Setting aside money every paycheck to contribute to your HSA can lead to long-term growth and more financial protection against future unknowns. But one question many people have is whether it's possible to pause contributions during the year. Does that derail your savings or make you ineligible to use your HSA? Understanding HSA Contributions You'll be happy to know that you're free to start or stop contributions at any point throughout the year. While many people fund HSAs automatically, there's also the option to use a pay as you go funding method. If things change, you can temporarily pause automatic contributions as you see fit. It doesn't prevent you from using the money already in your HSA for qualified medical expenses. The money in your HSA is yours; stopping contributions doesn't change that. In fact, you can lose your eligibility entirely. It's possible to no longer qualify for an HSA if you get secondary insurance coverage or no longer enroll in a high-deductible health plan. If that were to happen, you wouldn't be able to contribute more money to an HSA. However, you still own the HSA and can continue to use it for qualified medical expenses. The important thing to remember about contributions is that you must remain under the annual limits. Otherwise, excess contributions are subject to additional taxes. You have full control over your contribution. With a pay as you go funding method, you can pause contributions, change how often you put money into your account and adjust how much you contribute annually. HSAs are tax-advantaged in many ways. Familiarizing yourself with contribution and distribution rules will help you make the most out of these accounts and save for the future. Read a similar article about new years financial resolutions here at this page. Is extended-interval fixed dosing of pembrolizumab associated with increased health care costs? read more
In the workplace, benefits are often used to entice top recruits and retain quality workers. Many employers provide benefits like health insurance coverage, but some also offer employer-funded accounts. These are accounts that the employer pays into on behalf of the employee. A health savings account (HSA) is an example of an employer-funded account.
How Does Funding Work? Employer-funded accounts may include contributions from both the employee and the employer, or they may be funded entirely by an employer. A health insurance plan, for example, may be funded entirely by an employer, meaning the employer pays the entire cost for the account. An HSA, on the other hand, may receive funds from both the employer and the employee, and funds from both are commingled and are available for the employee to use. When an employer contributes to an employee’s account, there may be limitations imposed by state or federal laws. For example, health savings account administration rules only allow contributions up to a certain amount by the employee and the employer. When an employer contributes funds to an employee’s HSA, the health savings account administration team must monitor the total amount of contributions to remain below the legal threshold. Matching Contributions Some employers fund employee accounts fully, but others will match employee contributions instead. In a matching scheme, the employer may set a percentage limit. For example, an employer may agree to match employee contributions up to 6%. This means that the employer will match employee contributions up to 6%, but beyond that 6%, only the employee contributions will fund the account. This is advantageous for workers since it equates to free money from an employer. Taking Money Out of an Employer-Funded Account Some employer-funded accounts allow employees to withdraw money, but most will require the employee to become vested. In most cases, having a vested interest in an account requires that employees complete certain steps first. To become vested, an employee may have to work for an employer for a certain length of time or contribute a certain amount of money to an account. This stops employees from taking advantage of employers by simply withdrawing funds from an account and then quitting the job. Read a similar article about HSA eligible expenses here at this page. Opening a health savings account (HSA) is a fantastic way to prepare for the unknowns of tomorrow. With healthcare costs being so high, it pays to have savings set aside to cover all of those unexpected expenses as they come. These accounts have become increasingly popular over the last decade, and it's not hard to see why.
Thanks to the ever-growing interest in HSAs, you have more options than ever. Countless HSA companies are vying for your business, promoting top-notch service and all the necessary integration. So how do you choose which company to work with as you secure your financial future? What Do HSA Companies Do? There are a few different ways to look at a company's role in creating and managing an HSA. It all depends on the level of service the organization provides. Companies can act as simple administrators or custodians. In that case, their only job is to hold the assets in a secure account. However, some companies take things a step further, offering a high level of service and more options. For example, you might find vendors specializing in strategic HSA investment, helping the account grow steadily over many years. Organizations with more detailed service options typically charge a higher fee. The same goes for companies that specialize in employer HSAs. Choosing the Right Vendor Ultimately, the right choice for you depends on your needs. If you want a simple, hands-off account management service, it may be best to go with the HSA partners of your insurance company. Many health insurance providers work with custodians and HSA vendors. The existing relationship makes connecting the dots much more straightforward. Partners often share online portals, making it easy to share documentation. That eliminates the frustration of managing distributions and dealing with behind-the-scenes logistics. Alternatively, third-party vendors may offer more options. Several companies prioritize investments and growth, giving you more opportunities to maximize your savings. Don't be afraid to shop around and see what's available. Finding the right company can make all the difference, helping you use your HSA to its full potential. Read a similar article about insurance open enrollment process here at this page. |