What Is a Health Savings Account? (HSA)
People who have a high deductible health plan (HDHP) can use a Health Savings Account (HSA) to pay for elective services like LASIK and other laser eye surgeries.
HSAs are tax-exempt trusts or custodial accounts that can be set up to pay for certain medical expenses, including the cost of LASIK. The money in your HSA can be used to reimburse you for expenses not covered by your HDHP. Maximize your tax-savings by contributing to your HSA until you reach a certain limit set by the IRS every year. The money you contribute rolls over, meaning you can grow your HSA account to use in retirement and later in life.
In order to set up an HSA, you must find a qualified HSA trustee to work with (these can include banks, insurance companies, or anyone already approved by the IRS to be a trustee of individual retirement arrangements.)
The Benefits of an HSA
- You can use an HSA to help cover the cost of LASIK and other lasery eye surgeries provided by TLC
- You can claim tax deductions for contributions you, or someone other than your employer, makes to your HSA
- Contributions from your employer may be excluded from your gross income
- Contributions roll over from year to year until you use them
- Interest or other earnings on the HSA account are tax free
How Does an HSA Work?
To start saving under a HSA plan, you first must qualify by meeting a set of requirements determined by the IRS, primarily if you have a high deductible health plan. If you qualify, the next step would be to set up your HSA though a qualified HSA trustee. Employers can also choose to offer HSAs and make contributions to their employee’s Health Savings Accounts.
You will generally pay your medical expenses throughout the year without reimbursement from your HDHP until you reach the annual deductible for the plan. When you pay medical expenses that aren’t reimbursed by your HDHP, you can receive a distribution from your HSA to help cover the payment.
Many elective medical procedures are covered under HSAs, including LASIK and other laser vision eye procedures. Some employers do not participate in the HSA program, so it is recommended that you speak with your benefits manager.