It is open-enrollment season, and many Americans may consider opening health savings accounts — or HSAs — to reduce their taxable income and save for health-care expenses.
As long as you belong to a qualified high-deductible health plan, you can use money from your HSA to cover the cost of deductibles, co-payments and co-insurance.
It's important for consumers to "take control of their accounts to get maximum benefits," said Dr. Stephen Neeleman, founder of HealthEquity, a Utah-based company that manages more than $2.6 billion deposited in 1.5 million health savings accounts held by individuals and families.
Here are a few ways to make the most of your HSA:
You may also be able to use an HSA to bank against future health-care expenses, by investing unused HSA money in mutual funds or other investments. So check out your HSA-related investment options. They can provide a savings account for health-care needs in retirement.
"As the value of your HSA grows and you have enough to cover unexpected health-care expenses, consider investing the part not needed for expenses in mutual funds within your HSA," said Dr. Carolyn McClanahan, a financial advisor and founder of Life Planning Partners in Jacksonville, Florida. "This may be a good way to generate returns. Although as with all investments, the value can go down."