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Dispelling the HSA Myth – HSAs Only for Families

Jun 24, 2020 8:00:00 AM

At Bend, our mission is to make health savings accounts easy for everyone. And part of making HSAs easy for everyone is making sure you get the correct HSA information upfront, so you can make the most informed decisions—whether you’re completely new to health savings accounts or a seasoned HSA accountholder.

Unfortunately, there’s plenty of misinformation out there regarding HSAs. And here at Bend, we’ve heard pretty much every myth in the book (and online) regarding health savings accounts.

More than anything, we want you to know that HSAs are straightforward and nothing to be intimidated by. And we’re here to help you get the correct HSA information upfront so you can feel empowered to make well-informed decisions.

That’s why we’re back with another installment of our “Dispelling the HSA Myth” series, aimed at debunking popular HSA topics that are just plain incorrect.

Are HSAs an excellent option for families? Yes. But are families the only ones who can benefit from having an HSA? Absolutely not.

HSAs are an Excellent Option for Families

If you have a family, you’ll find many short and long-term benefits to having a high-deductible health plan (HDHP) with an HSA. You’ll also have the unique opportunity to take an active role in controlling the healthcare costs for your whole family while bettering your family’s overall financial health and well-being.

From a coverage standpoint, choosing family coverage for your health savings account allows you to use your HSA to pay for qualified medical expenses for you, as well as your spouse, any dependents you claim on your taxes and even anyone you could’ve claimed on your taxes as a dependent, but didn’t for a variety of reasons.

From a financial standpoint, you immediately save upfront on premium costs when you opt for an HDHP with an HSA versus having a traditional HMO/PPO insurance plan. Simply put, an HDHP with an HSA is much more affordable than a traditional insurance plan—especially for families, who most often shoulder the heaviest burden when it comes to high insurance premium costs. That monthly savings can add up quickly, and can be contributed straight into your HSA for even more tax-free savings and growth. And speaking of HSA contributions, choosing family coverage provides you with the opportunity to contribute the most money to your HSA annually. For 2020, that means you can contribute up to $7,100—or $8,100 if you’re 55 or older and take advantage of the $1,000 HSA catch-up contribution.

Plus, if you have an employer who contributes to your HSA, you get that added financial benefit that you wouldn’t otherwise receive with traditional health insurance and no HSA. And typically, employers contribute more for those who choose family HSA coverage versus those who only have individual HSA coverage.

From a tax perspective, the “triple tax savings” an HSA offers can often play a critical role if you have a family, since you’re able to layer the HSA tax advantages on top of any other tax breaks and benefits you receive for being married or having dependents. With an HSA, your HSA contributions are 100% tax deductible, your HSA funds can be used tax-free for any qualified medical expenses—for you, your spouse and your dependents—and those funds grow tax-free from day one.

And from a planning and saving standpoint, with a family to be thinking of now and into the future, having an HSA allows you to thoughtfully plan your contributions while saving and investing for future expenses and setting yourself and your entire family up for a bright and secure financial future.

Even More Reasons Why HSAs are Good for Families

Let’s take a quick look at even more of the other unique advantages an HSA offers to families:

  • Portability–Your HSA and the funds within it stay with you no matter what, regardless of job changes or health insurance changes.
  • Infinite rollovers–You’ll never be faced with a “use it or lose it” scenario with your HSA—your funds roll over year after year or after a job or insurance plan change with no penalties.
  • Flexibility of use for you and your family–You might be surprised at all the “qualified medical expenses” you can pay for using your HSA funds—everything from walk-in visits and surgical costs, to dental expenses, mental health services, vision care, prescription drugs and much more. And with the CARES Act, you can even use your HSA to purchase over-the-counter medication and supplies, including menstrual care products like cups, liners, pads, sponges and tampons.
  • Ever-expanding preventive care list for HSA participants–You can bypass your deductible and receive immediate benefits for any care that falls under the IRS’s constantly evolving preventive care list. This saves you money both short and long-term whether for you or a family member, especially since the list now includes care for many common chronic conditions, like asthma.
  • Multiple contributors–HSA contributions don’t have to come just from you. Your employer can contribute, as well as an extended family member or just about anyone else. It’s a great advantage to be able to fund contributions from multiple sources, especially if you’ve got a family to take care of.
  • Long-term investment opportunities–An industry-leading HSA like Bend HSA provides you with the ability to easily invest your HSA contributions just like a 401(k), helping you save more for the future, no matter what the future holds for you and your family.

The Flexibility You Need for Your Family

HSAs are all about flexibility, which is a great thing when you’ve got a family to consider.

We already touched on the flexibility of use an HSA provides for you and your family. But did you know that your spouse and dependents are able to be covered under your HSA even if they aren’t covered under your HDHP? It’s true, and just another way HSAs provide the ultimate in healthcare flexibility and convenience. When it comes to HSAs, the type of qualified HDHP coverage you have—family or individual—only determines your maximum annual contribution amount.

And don’t forget, due to the ongoing coronavirus pandemic and changes enacted by the CARES Act, you can now use your HSA to purchase over-the-counter medications, nonprescription drugs and other medical supplies, including menstrual care products like cups, liners, pads, sponges and tampons. It’s worth repeating, as this change alone can add up to huge yearly savings for you and your family.

And one final point regarding HSA flexibility—if your circumstances change and you need to move from family coverage to individual coverage, you can do so without penalty or any interruption of your funds. Just note, when you switch, you’ll then only be able to contribute up to the individual maximum annual HSA contribution limit, adjusted based on when you make the switch.

Good for Families, Good for Everyone

Hopefully from what you’ve read above, there’s no doubt in your mind that HSAs are an excellent option for families for many reasons. But while that’s true, hopefully it’s equally clear they’re also an excellent choice for just about everyone else, as the majority of HSA benefits and advantages are mirrored regardless of your circumstance or family status.

Combining an HSA-eligible HDHP with a health savings account is a simple equation with a powerful outcome for individuals and families of all ages, income levels and health circumstances. Using an HSA with an HDHP allows accountholders of all kinds to take full advantage of three types of tax savings, while also having a dedicated, portable, never-expiring savings account to invest and use for present and future medical expenses—whether for your whole family or just for yourself. And along with their flexibility, numerous tax advantages, investment opportunities and rollover capabilities, HSAs also offer a variety of other benefits to everyone who uses them.

If you’d like to learn more of the specifics on why HSAs are a great choice no matter who you are or if you have a family or not, take a few minutes to read our blog dedicated to why HSAs work for everyone.

Family or Solo, Bend is Here to Help You Make the Most of Your HSA

With Bend HSA, we’re here to help you make the most of your health savings account—no matter who you are or whether you’re part of a family or flying solo. We offer a simple-to-use, secure HSA with a superior user experience and unmatched customer service and support—for clients of all ages, income levels and family structures!

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