Health Savings Account (HSA)

A health savings account is an alternative to traditional health insurance. Paired with a qualified high-deductible health plan, the HSA offers a different way for you to pay for your health care expenses. A health savings account allows you to pay for current health care expenses and save for future qualified health care expenses on a tax-free basis.

Health savings accounts were created to help give control back to consumers and lower health care costs. You own and control the money in your health savings account. Decisions on how to spend the money are made by you. You will also decide what types of investments to make with the money in the account in order to make it grow.

You must be covered by a High Deductible Health Plan (HDHP) to be able to take advantage of a health savings account. An HDHP generally costs less than traditional health care insurance, so the money you save on insurance can therefore be put into the health savings account.

The following are some general features of health savings account:

  • The contributions you make to your health savings account are tax deductible, which reduces your taxable income.
  • Interest earned on your health savings account money is not subject to income taxes — in other words, you don’t have to pay income taxes on the earnings generated by the investments in your health savings account.
  • You may make tax-free withdrawals to pay for qualified health care expenses.
  • You own all of the money in your health savings account and it is yours to keep — even if you change medical plans.

Consider establishing a health savings account to maximize the benefits of your high deductible health plan. While you may open a health savings account with any institution of your choice, you can establish your account at BNY Mellon with our assistance.

Get the process started:




HEALTH INSURANCE TERMS



Affordable Care act

The Affordable Care Act (ACA), sometimes called Obamacare, is a federal law designed to make health care more affordable, accessible and of higher quality.

COINSURANCE

The percentage of the bill you pay after your deductible has been met.

COPAY

A fixed amount you pay when you get a covered health service.

DEDUCTIBLE

The annual amount you pay for covered health services before your insurance begins to pay.

emergency care services

Any covered services received in a hospital emergency room setting.

health insurance marketplace (exchange)

The government Website (healthcare.gov) where you can purchase health insurance and see if you qualify for a tax credit (subsidy) to help pay premiums and out-of-pocket costs. 

in-network provider

A provider contracted by your insurance company to accept an agreed upon payment for covered services. 

OUT-OF-network provider

A term for providers that aren’t contracting with your insurance company. (Your out-of-pocket costs will tend to be more expensive if you go to an out-of-network provider.)

out-of-pocket

Your expenses for medical care that aren’t reimbursed by insurance, including deductibles, coinsurance and co-payments.

penalty

If you can afford health insurance, but choose not to buy it, you must have a health coverage exemption or pay a tax penalty on your federal income tax return.

premium

The amount you pay to your health insurance company each month. 


Preventive services

Health care services that focus on the prevention of disease and health maintenance.

rehab SERVICES

Services and devices to help you recover if you are injured or have surgery. This includes physical, occupational and speech therapy.

special enrollment period

The time after the Open Enrollment Period when you can still purchase health insurance only if you have a qualifying life event (losing other health coverage, having a baby, getting married, moving).

specialist

A physician who has a majority of his or her practice in fields other than internal or general medicine, obstetrics/gynecology, pediatrics or family practice.

SUBSTANCE ABUSE DISORDER SERVICES

Includes behavioral health treatment, counseling, and psychotherapy.

tax credit

Financial assistance from the government that helps those who are eligible pay for health insurance. Eligibility is generally determined by household income and family size.

Tiered benefit plan

A health care plan featuring multiple levels of benefits based on the network status of a particular provider.