How does it work?
Health savings accounts
You can open an HSA to help pay for medical expenses. You may be able to get an HSA through your preferred bank or credit union. If you want to take advantage of an HSA, you need to be enrolled in an HSA-compatible health plan. If you already have an HSA, you can pair it with a UCare HSA-compatible plan.
HSA-compatible health plans
An HSA-compatible plan, sometimes called a high-deductible health plan, has a lower monthly premium and higher deductible than a copay plan. Because you will pay more out of pocket before you reach your deductible with this kind of plan, you can use an HSA to save money for medical expenses.
An HSA-compatible plan is available through a health plan company like UCare. You choose your network (broad or focused) and the level of coverage (silver or bronze) that works best for you. Just like the other UCare Individual and Family Plans, HSA-compatible health plans cover preventive care and cap your out-of-pocket expenses.
You aren’t required to open an HSA in order to enroll in an HSA-compatible plan, but it is a great option for saving money and paying for eligible medical expenses.
Save on taxes
- You can deposit up to $3,500 each year tax free ($4,500 if you’re over age 55)
- Withdrawals are tax free when funds are used for eligible medical expenses
- Any interest you earn on your account is tax free
Is an HSA-compatible plan right for you?
This kind of health plan might be a good fit if you are generally healthy and don’t expect large health care expenses this year. It’s also a great option if you’re interested in actively managing your expenses and using your HSA as an investment tool.
If you think you and your family might need expensive health care in the next year, a copay plan may be a better option.
Never lose your HSA funds
Unlike a flexible spending account (FSA), you can keep funds you don’t use year after year. You can also invest the funds in your account and keep your earnings tax free. Talk to your financial planner or credit union rep about investing your HSA funds.
Once you enroll in Medicare, you can no longer contribute to an HSA. But you can continue to use the funds in your account to pay for qualified medical expenses. You can also use your HSA funds for other purposes after age 65, but you’ll pay taxes on those funds you use for anything other qualified medical expenses.
Where to open an HSA
We work with Minnesota’s Credit Unions, but you can open an HSA-compatible account with any financial institution you’d like. With over $24 billion in assets, Minnesota’s Credit Unions are local, trusted financial cooperatives that serve more than 1.8 million members at almost 400 branch locations around the state. As not-for-profit institutions, credit unions give back to the communities they serve.