Why Do I Need an HSA When I Have NH Health Insurance?

October 15, 2019

A question we often here at Brownell Insurance. Although your family may be covered with an NH health insurance policy, you can still gain many benefits from additional coverages. One of these added coverages is called a Health Savings Account or HSA. This article will cover the fundamentals of an HSA and the benefits it provides.


What is a health savings account?

According to HealthCare.gov, a Health Savings Account is a type of savings account that lets you set aside money on a pre-tax basis to pay for qualified medical expenses. By using untaxed dollars, you may be able to lower your overall health care costs.   However, this account is available only to taxpayers in the United States who are enrolled in a high-deductible health plan.


What is a high-deductible plan?

A high-deductible health plan is a plan that features higher deductibles than traditional insurance plans. HDHPs can be combined with an HSA or health reimbursement arrangement to allow out-of-pocket expenses to be paid on a pre-tax basis. The Affordable Care Act defines which health plans are required to carry an HSA account as an additional option for subscribers.


Qualified expenses

To see a complete list of eligible medical, dental, vision, and pharmacy expenses, click here. However, this list will provide you a brief overview of the most commonly utilized items under an HSA:

  • Acupuncture
  • Chiropractors
  • Co-pays
  • Eyeglasses and contact prescriptions
  • Hearing aids
  • Home care or Nursing home care
  • Long-term care expenses
  • Medicines prescribed by a doctor
  • Optometrist
  • Surgeries
  • Therapies



Non-qualified expenses

One thing to keep in mind is if your HSA is used for non-qualified expenses, you risk facing a penalty. Typically the implemented penalty will be 20% of the total amount utilized. Thus, it is crucial to keep all itemized receipts and copies of prescriptions for over-the-counter medications. By doing so, you can save time and frustrations in the event of an IRS audit.

The most commonly used areas that are considered non-qualified are as follows:

  • Child care
  • Elective cosmetic surgery
  • Funeral expenses
  • Health club fees
  • Nonprescription drugs, medicines, and supplements
  • Nutritional supplements


How can I open an HSA?

Most local banks will provide the option to open an HSA at their financial institution. However, it’s essential to keep in mind that the account will not be regulated as it would through an employer. Thus, impeccable record keeping is a must.


For more information on health saving accounts, contact the team at Brownell Insurance. Committed to educating our customers, we are more than happy to not only help answer questions but to help you find the best NH health insurance coverage. Call us today at (603) 437-1992.