Benefits of a Health Savings Account (HSA)

In today’s post I am going to use myself as an example to show you the benefits of a Health Saving Account (HSA).

On March 24, 2009 I decided to go to a sleep lab and get tested for obstructive sleep apnea. For those of you who are unfamiliar with this condition, obstructive sleep apnea or OSA for short, is a common sleep disorder that involves the partial or complete collapse of the airway during sleep. After researching the condition I found out that people can stop breathing in their sleep and actually die as a result of OSA! Having been a chronic snorer for many years (snoring is a major symptom) I decided it would be a good idea to get tested.

Anyone who feels they may have OSA should the read through the following symptoms.

-Excessively loud snoring

-A type of snoring that includes a pause in breathing and a sudden gasp for air (due to airway being closed).

-Excessive sleepiness, morning head aches, trouble concentrating, irritability, anxiousness, or depression.

-Frequent trips to the bathroom at night and loss of interest in sex.

For those interested in knowing more about OSA please visit the American Academy of Sleep Medicine.

So how was the sleep study covered by my insurance plan?

Well, the total cost for the sleep study (polysomnogram) was $2128.15; this whole figure was applied to my $3000 deductible. My current insurance policy is with Blue Shield of California and is HSA compatible. I have funded the maximum HSA contribution amount of $2900 in 2008 and $3000 in 2009 (maximum contributions for a family were $5800 in 2008 and are $5950 in 2009) which comes out to be $5900 of tax deferred money that I have saved. Not only did I benefit from saving on a tax deferred basis but now I only have $871.85 of my deductible left to satisfy before Blue Shield is going to pay 100% of my medical claims (hospitalization, surgery, catastrophic emergency, ect..) To top off the situation there was no element of surprise, I could afford the sleep study because I had planned ahead and funded my HSA.

For those of you who would like more detailed information on HSAs please visit our website at J.C. Lewis Insurance Services and click "tell me about HSAs". There is a very valuable tool that you can access (at the above link) that will calculate your tax deferred savings for the life of your policy, it will also help you stay up to date with the maximum annual contributions.

The Bottom Line

If you have the money to fund an HSA you are making a great investment in your health! You are preparing for future medical expenses and the funds will roll over every month tax free!