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Health Insurance is a type of insurance that covers the cost of medical expenses. Depending on the type of coverage you have, your insurance can be structured in many different ways. You can be lucky enough to have your employer cover the entire cost of health insurance or maybe you are self-employed and have to deal with getting a policy from the insurance marketplace. Either way, there are a lot of moving parts and terms you should know so you can make the best decisions for you and your family.
Health savings accounts are becoming increasingly popular in the United States and for a good reason. They offer a tremendous opportunity to save for health expenses both now and in retirement with big-time tax benefits. Here is what you need to know:
You need to have a qualifying high deductible health plan in order to be eligible for an HSA account
You can open an HSA account at many financial institutions, but shop around for the lowest costs
In 2019 you can contribute up to $3,500 for an individual and $7,000 for a family.
You will receive a debit card or checks to access the account. You can also transfer funds to a linked bank account.
HSA’s are the only account that gives you the tax trifecta. You get a tax deduction on contributions, the funds grow tax-free and then withdrawals for qualified medical expenses are withdrawn tax-free. Wowsers!
You don’t need to use the money each year. The account balance rolls over year after year.
You are able to invest the funds in your HSA account in low-cost index funds for long-term growth.
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