How my family saved almost $2,000 in 2022 by using our HSA...

How my family saved almost $2,000 in 2022 by using our HSA...

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You may have heard of a Health Savings Account (HSA), and you might even have one. HSAs are certainly growing in popularity these days. However, it might surprise you to know that HSAs have been around for nearly 20 years, since late 2003. Initially, HSAs took quite a long time to gain traction. Many people were apprehensive to enroll on a High Deductible Health Plan (HDHP) and give up a “traditional” health plan with copay benefits (a requirement to be an HSA-qualified health plan), to open and contribute to an HSA.

Fast forward nearly two decades, and Americans are finally seeing the potential tax savings vehicle that an HSA can be. According to the Kaiser Family Foundation’s 2022 Employer Health Benefits Survey, about 24% of covered workers were enrolled in HSA-qualified HDHP’s in 2022 (2022 Employer Health Benefits Survey, 2022). The statistics are similar for small firms and large firms.

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My family is very familiar with the HSA as we have been insured by a High Deductible Health Plan (HDHP) for about ten years now and have been contributing to our family’s HSA annually ever since. I have a large family of seven: my husband and me, plus our five kids. The biggest two reasons my large family has continued to choose an HSA-qualified HDHP year after year include:

1)????the TAX SAVINGS off our healthcare claims.

2)????the PREMIUM SAVINGS off our monthly healthcare premiums.?

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So, how did my family save almost $2,000 in 2022 by using our HSA?

1.????Throughout 2022, my husband contributed to our family’s HSA through his employer, having his contributions deducted from his paycheck PRE-TAX and transferred into our HSA. Because our entire family is insured on an HSA-qualified plan, we were able to contribute up to the annual family limit set by the IRS. This means we saved a lot by not paying any INCOME taxes or PAYROLL taxes on our contribution amounts. When we added up the tax savings, it was almost $2,000!

2.????My family paid for our out-of-pocket healthcare expenses with tax-free dollars from our family HSA account. This included doctors’ visits (non-preventive), lab work, prescriptions, one hospital stay, dental and vision care, and even our qualified over-the-counter drugs.

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A few more things I love about the HSA:

1.????The funds are always ours to keep.

2.????Any unused funds roll over year after year. They are never forfeited to the employer.

3.????Our family can earn tax free interest and gains on our HSA funds and even long-term investments that can grow over time.

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Let me add a quick disclaimer here that an HSA-qualified HDHP is not the best fit for everyone, and you should weigh the pros/cons for yourself before choosing one. RESEARCH your options and SPEAK with a qualified licensed healthcare broker for further guidance. In a world where healthcare costs continue to rise quickly, the HSA is certainly an excellent healthcare cost savings strategy worth considering.

Refer to the IRS for specific HSA rules and regulations.

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2022 Employer Health Benefits Survey. (2022, October 27). Kaiser Family Foundation. https://www.kff.org/report-section/ehbs-2022-section-8-high-deductible-health-plans-with-savings-option/