What Type of Health Insurance Coverage Qualifies the Employee to Open a Health Savings Account?
In order to open a health savings account, an employee must enroll in a high-deductible health insurance plan. A high-deductible health plan requires the insured to reach a high amount of medical expenses paid out of pocket. The health savings account allows the employee to contribute money tax free into the account. The money remains tax free as long as the employee keeps the money in the account or uses the funds for medical expenses. What is the Difference Between a Health Savings Account and a Flexible Spending Account? Both health savings accounts and flexible spending accounts allow the employee to put money aside for paying medical expense. Employees must use the funds invested in flexible spending accounts by the end of the year or they will lose the remaining dollars. Health savings accounts belong to the employee whether they use the money during the year or not. What Happens to My Health Benefits if I Leave My Job? Employees who lose health benefits as a result of employment
