Health savings accounts are becoming more and more popular. A health savings plan or HSA as it is commonly called is a plan offered by many insurance companies that have high deductible plans. The deductibles usually have to be at least $1,000. This would be the amount you would have to pay out of pocket before your insurance would kick in.
Health Savings plans can be a great way to save money to meet your deductible and get work as a tax-deductible savings plan. Many companies will contribute a certain amount of money to the account every year because it is cheaper for them to do this then to pay high monthly premiums on small deductible policies. If you are lucky enough to have a company that does this, you can purchase a new pair of prescription eyeglasses or contact lenses without spending a penny of your own money.
How did these savings plan come about? These accounts are set up by the IRS in that
all your contributions are complete tax -free. They are also offered by insurance companies if you take a high deductible and is still completely tax-free. The money in this account has to be used for health-related services. As long as the service you are withdrawing the money for is health related, the amount remains tax-free. These accounts can earn a small amount of interest. Usually between 1 and 1.5%. You do not have to use the entire amount in your HSA each year. Your balance will roll over to the following year.
Here’s the best part. Everyone is feeling the money pinch these days and if you are an eyeglasses wearer you can will be able to save quite a bit with this plan, especially if your company contributes to it. If your company contributes Five Hundred Dollars per year for instance, your purchase of cheap prescription glasses would most likely cost you nothing. You can now use your Health Savings Account to purchase eyeglasses and contact lenses online.
However you plan to purchase your next eyeglasses or contact lenses make sure you save your receipts. This could give you another deduction when it comes to file your income taxes.