Money & Career
Health Savings Accounts Provide Medical Expense Relief
7/1/2019 1:00:00 PM
Health Savings Accounts

A typical American family of four insured by the most common employer-sponsored health plan spent a minimum of $28,000 on healthcare in 2018, according to the annual Milliman Medical Index report. This was an increase of $1,222 from 2017 and includes the average cost of health insurance, as well as deductibles and out-of-pocket expenses.


"When you look at this number, which is just an average, it’s easy to understand why medical expenses are a big financial stress for most people,” says Renee Lassiter, Lakeside Bank Assistant Vice President. "Many health insurance policies today place more of a burden on the insured, with more exclusions and higher deductibles. Opening a Health Savings Account, or HSA, is a convenient strategy that can help you save for future medical costs to offset some of these expenses.”  


Lassiter explains that contributions to an HSA are 100% deductible (up to the legal limit) — just like an IRA. Withdrawals to pay qualified medical expenses, including dental and vision, are never taxed. Interest earnings accumulate tax-deferred, and if used to pay qualified medical expenses, are tax-free. "The money rolls over from year-to-year,” adds Lassiter, "so you can accumulate savings to pay for larger expenses that may occur as you age and have increased medical needs.”


HSAs can be one means of saving money for long term care needs, including qualified long term care costs and long term care insurance premiums. 


To qualify for an HSA, Lassiter says applicants must have a high-deductible health plan. Health insurance deductibles must be at least $1,350 for an individual policy or $2,700 for a family policy. 

"Individuals can contribute $3,500, and $4,500 to an HSA if they are 50 or over thanks to a ‘catch-up’ contribution option,” Lassiter explains. "Families can contribute $7,000 to $8,000, depending on age.”

For more information about health savings accounts, call Lakeside at (337) 474-3766, visit LakesideBanking.com, or stop by any location.

Posted by: Kristy Armand | Submit comment | Tell a friend

Categories: Finances

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