I got paid to go to the doctor this morning. To be fair, there were needles involved, so it wasn’t completely painless, but it was definitely worth it.
Why did I do it? I could try to convince you that it’s because I chose to be proactive about my health but I’m not going to lie: it really was about the money. The proactive bit? That was a bonus.
As a working mom, my hours can be pretty crazy. In addition to work and school and travel for sports, medical visits take up a lot of my time. I figure I make at least 12 trips to doctors per year for dental, vision, and regular check-ups for the kids alone. That doesn’t count the extra trips: the X-rays after a soccer play gone wrong or the last minute exam for a cough that just wouldn’t stop and turned out to be bronchitis.
So sometimes – okay, most times – I don’t make it to the doctor for my check-ups (please don’t tell my mom).
But here’s the thing. My employer offers a perk to its employees: employer contributions to a Health Savings Account (HSA). Each year, in addition to the money that I sock away (more on that in a moment), the company kicks in some, too. And as an added incentive to get employees like me to participate in preventive health care, the company sweetens the deal by offering additional contributions if you meet certain requirements. In my case, that requirement meant heading to the doctor for a check-up.
Not every company offers an HSA (if you’re not sure if your company has a plan, ask). And even if they do, employers are not under an obligation to make contributions to an employee’s HSA. But if your company does offer an HSA, it’s a great way to save on medical costs.
To qualify for an HSA, you must be covered under a high-deductible health plan (HDHP). For 2017, the term “high deductible health plan” means, for participants who have self-only coverage, an annual deductible that is not less than $2,250 but not more than $3,350; for self-only coverage, the maximum out of pocket expense amount is $4,500. For participants with family coverage, the annual deductible must not be less than $4,500 but not more than $6,700; for family coverage, the maximum out of pocket expense is $8,250.
If you qualify, you may be able to claim a tax deduction for contributions you (or someone other than your employer) make to your HSA even if you don’t itemize your deductions on Schedule A of your federal income tax return. And those contributions from your employer? They’re not considered income for federal income tax purposes. That’s right: they’re tax-free.
It gets better. Funds in an HSA grow federal income tax-free. And when you take them out? Distributions for qualified medical expenses (including dental and vision expenses) are not taxable for federal income tax purposes.
And unlike a Flexible Spending Account (FSA) that requires you to spend your funds each year or lose them, you can roll over your HSA contributions from year to year and continue to save. Plus, an HSA is portable which means that you get to keep it even if you change employers, retire, or otherwise leave the workforce.
You and your employer can make contributions to your HSA in the same year. If family members or other folks want to make contributions on your behalf, that’s okay, too, subject to contribution limits.
The more money that you can put away, the money that you can save, subject to IRS limits. For 2017, if you have self-only HDHP coverage, you can contribute up to $3,400. If you have family HDHP coverage, you can contribute up to $6,750. If you’re 55 or older, you may be able to contribute a little more as “catch-up” contributions.
So that visit to the doctor today? It landed me a tax-free contribution which will grow tax-free until I take it out for future medical expenses. Those three kids I mentioned? Someday, they’re going to need braces. We’re already at the contact lens stage for two of them. Every dollar matters. And let’s face it, while I needed the push, the visit wasn’t a bad idea – although my arm is still killing me from that tetanus shot.
