For many organizations, it’s “open enrollment” season which brings an opportunity to review your benefit options, including your health insurance. If you are enrolled in a High Deductible Health Plan (HDHP) and are thinking about opening a Health Savings Account (HSA), here are a few pros and cons to consider.
Pros
HSAs allow you to use tax-free withdrawals to help cover qualified medical expenses. The money in your HSA is portable, meaning it’s yours to use. So, if you change jobs, medical coverage carriers, or become unemployed, your contributions will remain in your account without penalty.
Other advantages include:
- Dividends on your balance (2.00% APY* on a Cinfed HSA)
- A debit card to pay for and track expenses
- Contributions can come from any individual who would like to add to your balance. Your employer may also provide a matching deposit into your account.
Cons
An HDHP could mean a bigger financial commitment than other types of health insurances policies, since your deductible is higher. Depending on the situation, it can be difficult – even with funds in your HSA – to have the money to cover a costly or unexpected medical cost (if you have not met your annual deductible).
Other challenges include:
- Annual or monthly fees charged for some accounts
- Penalties for non-medical withdrawals
- Minimum balance requirements for some accounts
When it comes to your healthcare, you don’t want a hassle. Cinfed offers a free and convenient HSA accounts with benefits that enable you to quickly and efficiently cover your medical costs. Your Cinfed HSA Debit Mastercard deducts funds directly from your account that can be used at any Mastercard-eligible location.
*Many people don't realize that they can earn dividends on their HSA accounts. Cinfed HSAs earn 2.00% APY - the highest rate in the tri-state – meaning you’re constantly earning more on your balance than HSAs at other local institutions.**
Visit Cinfed’s Health Savings Account page to learn more about how to set up your HSA.
*APY = Annual Percentage Yield