Save Money and Get a Triple Tax Advantage
Want to get more from the money you spend on healthcare? A health savings account (HSA) can be a great way to put money aside for future medical bills and boost your spending power at the same time. It’s a little like a retirement account for medical expenses.
You can use the money for medical bills immediately or save it until you retire or at any point in between. If you have an HSA through your employer, you can take it with you when changing jobs.
The thing to remember is that your HSA contains your money, so you never have to “use it or lose it.”
When you put money into your HSA, you get these advantages:
- Payroll deductions into your HSA are made pre-tax, while after-tax contributions can be claimed on your tax return at the end of the year. Both may reduce your taxable income.
- Interest you earn on the account is tax-free.
- The money isn't taxed when you use it to pay for qualified medical expenses, like medical bills.
This example shows the tax savings for a married couple in Rhode Island filing joint tax returns.
- Household income: $65,000
- Pre-tax HSA contribution: $2,000
- Tax savings: $371
1This example is for illustrative purposes only and does not represent actual tax impact.
How does it work?
If you have a qualified high-deductible plan like BlueSolutions, you can open an HSA and use the money in three easy ways:
You can pay your doctor directly through the new user-friendly website as well as check balances and add money to your account. Reach it by logging in to bcbsri.com.
- Debit card
You can pay right at the doctor’s office or pharmacy with your HSA debit card.
- Mobile bill pay
See the end of this article for instructions on downloading the BlueSolutions Spending on the Go app.
What can I spend my HSA money on?
Of course you can use your HSA money to pay your share of qualified medical expenses like doctors’ visits and lab tests. And you also can use it to pay for hundreds of qualified health-related expenses, including many you might not expect:
- Dental visits
- Qualified long-term care insurance premiums
- Hearing aids
How do I get started?
If you have a BlueSolutions plan through your employer, you may already have an HSA. To activate it, log in to bcbsri.com and click “Your HSA” in the left-hand menu. If you buy your plan directly from BCBSRI, learn how to open an HSA.
Tip: Think about investing
If you plan to keep your money in your HSA for a while, think about investing it, just as you would with your retirement account.2 You can find more information on your options after you're logged in to bcbsri.com.
Try the app
If you like managing your expenses on the go, try the app. It’s called BlueSolutions Spending on the Go. You can add money to your HSA, upload claims, submit receipts—everything you expect from a modern app.
Want instructions for the app? Log in to bcbsri.com and click on “Your HSA” in the left-hand menu. Under “Documents and Forms,” you’ll find the instructions.
2HSA investment funds are subject to risk. Investment return and principal value will fluctuate and when redeemed may be worth more or less than their original cost.
This information is not intended as legal or tax advice. Please contact a competent legal or tax professional for personal advice on eligibility, tax treatment, and restrictions. HSAs are not insurance.