Have you considered adding an HSA to your wealth management strategy? This special healthcare perk could be a great tax-free addition to help you save on your necessary health purchases. It’s an often underutilized tool but is growing more prevalent in the American workforce as a perk. In fact, about 40% of employers in the U.S. have offered an HSA-qualifying health option as of 2019, resulting in an average of 8% increase through the present day–which amounts to approximately 32 million total HSAs in the market.

Below, we’re diving into what an HSA is and the benefits you can gain from implementing it into your long-term wealth management strategy. We’ll also be answering commonly asked questions about this unique healthcare coverage option.

What is an HSA?

An HSA stands for a Healthcare Spending Account. You’ll be able to put money aside (that remains pre-taxed) for spending on necessary medical devices and accessories. This assures you that you’ll have coverage in the event of a medical diagnosis or need and gives you access to new tax-saving strategies.

What tax benefits can you get from an HSA?

HSA benefits are extremely competitive. Often, your specialty savings accounts only offer one singular tax benefit – but you can enjoy three different types of benefits with an HSA. Any deposits you make into a qualified HSA account are:

Because of these benefits, it’s generally a more flexible and competitive option to take advantage of if your employer offers it.

Can I open a Health Savings Account by myself?

A common misconception about an HSA is that your employer must offer the perk on your behalf to use one. This isn’t true – consumers can open one on their own. However, a few things can void your opportunity to do this, such as if you’re already qualified under Medicare, TRICARE or other forms of disqualifying coverage. You also won’t be able to open your own HSA if you’ve been claimed as a tax dependent.

What risks are there with an HSA?

An HSA is considered a low-risk account. The one thing you’ll need to be mindful of is a potentially high deductible. However, you can manage this risk by thoroughly researching the benefits and restrictions of your account options and determining the best account type and provider for your needs.

Looking for wealth-building strategies for physicians?If you’re looking for strategies to move you to a place of high net worth vs. high income, the team at Money Insights is here to help. Our expert team has helped hundreds of professionals map their route to financial wellness and success with some of the most competitive industry-leading strategies. For more information and to get started today, please visit our website.

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