The CARES Act Introduces Powerful New Features to Health Savings Accounts
While there is not a single person in the country who would say no to $1200, some of the most important provisions of the CARES act have gone largely unseen. Among these provisions are some long-awaited additions to your HSAs spending power.
The result is an increase in savings in a time when most of us could use it the most.
Don’t Have a Health Savings Account?
If you still don’t have a Health Savings Account, now might be the time to pull the trigger. HSAs are retirement-boosting investment accounts that allow people to save, grow, and withdraw money tax-free, provided that the money is being spend on a qualified health expense.
Considering the amount of money that Americans are forking out for health care in retirement (pushing $300K) having a tax free account for that very purpose is a good idea for anyone who is serious about stretching their retirement dollars.
What the CARES Act Did for Health Savings Accounts
With the passing of the CARES act, the United States government released $2 trillion in aid to the Americans. It also included a number of important provisions, some of which will have a big impact on anyone who has and HSA.
1.) Telemedicine can be covered without meeting your deductible
One of the most immediate provisions of the CARES act allows for expanded telemedicine access. Although temporary, this benefit allows HSA-qualified policy holders to access telemedicine services before their deductible has been met.
2.) Prescriptions are no longer needed for over-the-counter medicine
Over-the-counter medicines like Advil, Tylenol, and even cough syrup can now be purchased with tax-free HSA dollars, without the need to get a prescription first.
3.) Menstrual care products are now eligible for reimbursement
For the 100 million + women in the United States, this is a welcome addition. While long overdue, the addition of menstrual care products to the eligibility list should be celebrated. Tampons, liners, cups, pads, and more can now be purchased with tax-free HSA money.
Your HSA Can Pay for More Than You Think
Staying healthy is an ongoing battle, and health savings account can make it a less expensive one to fight. Not only are almost all treatments and procedures eligible for reimbursement, but so are a number of products that can help treat, prevent, and soothe a number of common ailments that don’t warrant a doctor’s visit.
Most people are unaware of some of the things that can be purchased with tax-free HSA money. Here are a few of the most unexpected allowable HSA expenses:
- Prescription sunglasses
- Health-related transportation and travel
- Psychology or psychiatry treatment
- Fertility enhancement products
- Dental care
- Eye surgery
- Birth control
- Bandages (& other first-aid kit essentials)
Compare Pricing on the Best HSA Plans Available
What HSA’s Can’t Pay For
Technically, the funds inside of your HSA can be spend on whatever you want. After all, it’s your money. But the only way to take full advantage of the triple-tax savings of a health savings account is to only use it to reimburse qualified medical expenses.
General health products, like multivitamins, tonics, and supplements are not eligible expenses. Neither are cosmetic-type products, like teeth whiteners and elective cosmetic surgery. In fact, until the CARES act came along, even OTC medicines Tylenol were considered ineligible.
Remember: every time you use your HSA for a qualified purchase, you are putting a little bit of tax savings back in your pocket. It might not sound like much for a single bottle of Tylenol, but over the next thirty years … well … you’d be surprised.
Health Savings Accounts give Power to the People
Consumer-driven healthcare is all about returning power to the hands of the people that are really paying for it. After all, why should anyone except ourselves have the authority to make decisions about our personal well-being?
HSAs allow consumers to decide how exactly their health care dollars are being spent. They are also capable of turning tax-savings into a considerably sized retirement egg. For this reason, we believe that access to HSAs should be expanded, and not restricted to only certain kinds of insurance plans.
If you have questions about your HSA, or if you are interested in signing up for an HSA-qualified health insurance plan, give us a call. You can also visit the website for a free quote.
Here are some additional articles on HSA plans: Do You Know How to Keep Track of Your HSA Qualified Expenses? | How to Combine an HSA and a Health Sharing Plan
Hi! I’m Misty Berryman, and I’m one of your Personal Benefits Managers. I like working with HSA for America because we’re creating solutions to healthcare problems. Our focus on money-saving alternatives like HSA plans and health sharing programs, and the variety of health share programs we offer, are what set us apart. Read more about Misty on her Bio page.