As you browse through the health insurance marketplace looking for coverage, your search results are likely to yield a number of plan options. One you may not be familiar with is a health savings account, or HSA. While this isn’t a type of policy that covers medical costs, an HSA can be ideal for those who would have trouble paying a high deductible should the need arise. According to Steven Hall - Farmers Insurance, based in Mountain Grove, MO, health savings accounts offer many people a viable solution to the financial burden large deductibles can cause. Below, the insurance specialist explains exactly what an HSA is.

Health savings accounts are similar to a personal savings account, but they are specifically designed to be used to help pay for medical expenses. To open an HSA, you must meet the eligibility requirement of having a high-deductible health insurance policy. Plans with high deductibles generally lower monthly premium rates, but the large deductible amount can be difficult to meet when expensive health care is suddenly needed. This is when the funds in an HSA would be beneficial.

There are several advantages to having a health savings account. Deposits are completely tax deductible, and any withdrawals you make to pay for medical bills won’t be taxed. Interest earned on the money in the account is tax deferred and will become tax free if the funds are used solely to pay for qualified medical expenses. At the end of the year, any money that hasn’t been used will stay in the account and continue to earn interest. When you open an HSA, you will be in full control of how much you wish to contribute and when you decide to take it out.

Health savings accounts can be set up individually through your health insurance provider or workplace. These tax-advantaged accounts can equal great savings on health care. To learn more about HSAs or find a compatible plan, contact Steven Hall - Farmers Insurance at (417) 926-7900. You can also visit the website for a free health insurance quote.