Review:
Health Savings Accounts (hsas)
overall review score: 4.5
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score is between 0 and 5
Health Savings Accounts (HSAs) are tax-advantaged savings accounts that can be used to pay for qualified medical expenses. They are designed to help individuals with high-deductible health insurance plans save money for healthcare costs.
Key Features
- Tax advantages
- Ability to roll over funds from year to year
- Portable and owned by the individual
- Can be used for a wide range of medical expenses
Pros
- Tax benefits - contributions are tax-deductible and withdrawals for qualified medical expenses are tax-free
- Flexibility - funds can be used for a variety of medical expenses, including dental and vision care
- Ownership - the account belongs to the individual and can be carried over even if they change jobs or health insurance plans
- Potential to grow savings over time through investments
Cons
- High deductible requirements - individuals must have a high-deductible health insurance plan to qualify for an HSA
- Limits on contributions - there are annual limits on how much can be contributed to an HSA
- Penalties for non-qualified withdrawals - withdrawing funds for non-medical expenses before age 65 incurs taxes and penalties