Wellman Shew notes that when it comes to securing your future, you need to think proactively by taking steps to secure your retirement.

The healthcare industry is ever-changing, and there are new trends that come up now and then. Want to work towards securing your future? Here’s another fintech trend that you should know about — Health Savings Accounts (HSAs). So, what exactly is an HSA? Is this something you should invest in? Wellman Shew digs deeper into everything you need to know about the latest health trend.

What Is a Health Savings Account?

A Health Savings Account (HSA) is a savings account that allows you to set aside pre-tax money to pay for your healthcare expenses in the future. They are tax-advantaged savings accounts designed to pay for long-term medical bills.

You can open an HSA at a bank or a financial institution that participates in the federal HSA administration. HSA-eligible health plans let you contribute to an HSA and take it out when you need it for health-related expenses. These are qualified medical costs, including deductibles, copayments, coinsurance, prescription drugs, and even long-term care costs.

How Does an HSA Work? Wellman Shew Explains.

You can open an HSA at a bank or other financial institution. When choosing a company to manage your HSA, be sure to shop around to compare fees and other account features. Some employers may offer to pay for your HSA, but you’ll need to decide how much to put into your HSA each year.

Pros of HSAs

Wellman Shew explains that if you’re enrolled in a high-deductible health plan, you may contribute to an HSA and pay less in taxes. You may claim a tax deduction for the amount you contribute to your HSA. And you could also use your HSA funds to pay for future health care expenses at any time. 

HSA Limitations

You must leave funds in your HSA until age 65 for penalty-free withdrawals. Non-approved uses after age 65 will be income taxable only. Approved withdrawals after age 65 are still income tax-free and penalty-free.

Please note that HSA contributions are not possible once qualified for Medicare Part A, which normally occurs at age 65.

Is An HSA Right For You?

Health Savings Accounts are right for you if you have a high-deductible health plan. Wellman Shew adds that the account is ideal if you also want to start saving for future medical expenses. HSAs allow you to put money aside tax-free and use it for medical bills later on.  However,  you cannot contribute to an HSA if you have a low-deductible health plan.

Are you currently employed in a position where access to medical benefits is low? Are you looking to save money for your future medical costs? If so, then a health savings account is the best solution for you.  With the cost of healthcare going up every year, an HSA is a great tool to help you save money for your future expenses.

Wellman Shew holds a business administration degree and has been in the insurance industry since 1982. As the founder and owner of Shew & Company Inc. since 2005, he is a specialist in employee benefits, Section 125 plans, health savings accounts, long-term care, 401k plans, life insurance, and disability insurance. Wellman Shew is currently the agency manager of employee benefits brokerage at his company.