With the rising costs of health care an insurance premiums, many people are looking for ways to offset some of these expenses. The cost of medical treatment has made health insurance a must. Without it, people face serious financial difficulty or even refusal of treatment should anything serious happen on a medical nature. Further problems can also arise when many health policies don’t cover all expenses. Many plans don’t cover drugs or certain types of treatments.
Health Savings accounts are a way to help this situation. They are designed to allow for financial control and planning over your future medical expenses. There are a few different types of health savings account. Which one is best will depend largely on your individual circumstances.
One such account is the Flexible Spending account. It is easy to qualify and you don’t even need a current health policy. However, there are drawbacks. To set one up, and employee and employer decide an amount to be put into the flexible spending account. This money is to be used for uninsured medical expenses. The money then sits in the account where it can accrue interest. The funds are immediately available should you need them, even if the entire amount isn’t in the account it the time.
The flexible spending account does decrease your earnings. However the program is tax sheltered so your tax burden will also go down. If you need the funds for medical expenses you simply submit your receipts and are reimbursed from your flexible spending account. This cuts down on long wait times from standard insurance companies.
Flexible spending accounts can be useful but as stated before there are some drawbacks. The funds are only good for one year. If the end of the year arrives and you haven’t used the money, it cannot be carried over to the next year. They are also not transferable to other accounts. If you change employers the policy stops.
With the rising costs of health care and insurance, many people are looking for ways to offset expenses. By setting up various types of health savings accounts, the costs can be planned for and off set. Flexible spending accounts are just one way to take advantage of the health saving account schemes. They are generally cheaper but they have to be planned carefully.