Basics

Wage Up! How freelancers can make the most of their HSAs

If you're a self-employed freelancer like me, you know full well the perks of living the self-employed lifestyle, along with the downsides. For instance, how maddening dealing with income that fluctuates wildly can be. And as you're essentially running your own business of one, you're responsible for handling all your benefits, including health insurance. When it comes to saving on health care, you'll want in on all the tips and tricks to make your dollar stretch.

That's why health savings accounts (HSAs) can be so valuable for workers like me.

Unlike FSAs, which require employer-sponsored health plan to open, freelancers are indeed eligible for HSAs. Not only do HSAs provide a triple-tax advantage, but they can help you pay for out-of-pocket medical expenses. Here's one view on how freelancers can make the most of their HSAs:

Anticipate your health needs

While you can't predict developing a chronic illness or getting sick, figure out what routine and preventative care you'll need. For instance, I schedule my annual check-up every spring, and get lab work done twice a year to check my cholesterol and blood sugar levels.

I also see an OB/GYN at the end of the year, and usually wait until the end of the year to schedule other appointments that aren't urgent: eye exams, visits to the dermatologists, and so forth.

While my current needs are fairly simple, if you require more frequent doctors' visits, prescription medications, you'll want to budget accordingly.

[Pro Tip: If you have prescription medications, see if you can order them in bulk. It could net you a discount.]

Because funds in your HSA roll over (you don't need to spend all the funds in your account by the end of the year, like with an FSA), you don't have to feel rushed to get your balance to zero by December.

Sync up spending with the ebb and flow of work

If you're having a lean month, tap into your HSA funds to pay for eligible expenses. For instance, because I live in sunny Southern California, I need sunblock year-round. That's eligible, provided it's SPF 15+ and broad spectrum. Plus, I can purchase pain relief products, eyecare and lens wipes, and even advanced diagnostic products -- they're also typically eligible expenses.

To save money, you can poke around HSA Store and load up things you need in your cart and see what the total is. If you're trying to stay within budget, it's easy to see how much you'll be spending, and remove or add items in your shopping cart accordingly.

But, if you're having an awesome month income-wise, consider putting a bit extra into your HSA account. That way you'll have it tucked away during the slower periods. The contribution limits for 2019 are $3,500 a year for those participating in their HSA-qualified health plans as individuals, and $7,000 for those participating as a family. For instance, you can commit to socking away 5% of "extra" money you earn in a lucrative month into your HSA.

Use it as a financial cushion

As freelancers, we're prone to feast or famine with how much money we're raking in. During the lean times, tap into your HSA to pay for out-of-pocket medical expenses. You can also use it to purchase qualifying health items that you might use on a regular basis. What you can purchase with funds from your HSA could surprise you.

Start saving here


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Whether you're spending steadily or saving for something, Wage Up! is where we highlight the latest services available to buy with your HSA, every Monday on the HSA Learning Center. And for everything else about your health and financial wellness, be sure to follow us on Facebook and Twitter.

Retirement

Future Healthy: What happens to your HSA if you're 65 and still earning income?

When you hit the milestone age of 65, there are a number of financial considerations you'll need to work out. Mostly, assessing your retirement income and making adjustments to your budgets accordingly.

As for your health savings account, the entire HSA landscape changes once you hit 65. We'll go over the shifts that happen with your HSA, and what you'll need to keep in mind if you're still working during your retirement years.

You can use money from your HSA for non-qualified expenses

A hard and fast rule with HSAs is that you can only use the funds from your HSA account for eligible medical expenses. If you break this rule, you're potentially looking at a hefty 20% penalty, plus any income taxes. Once you turn 65 something magical happens: You're allowed to withdrawal money and use it on anything you like. That's right. You just need to pay the income taxes.

You can still enjoy tax-free spending

If you want to use that money tax-free, use it in the following ways:

Qualified medical expenses. These include prescription drugs, medical, dental, and vision care. You can also use the money from an HSA account to pay for part of your long-term care insurance premiums or certain premiums while you are unemployed. The key is to know what's eligible. Stay on top of eligibility, as it can change from year to year.

Medicare Part B and Part D. You can use funds from your HSA to pay for your monthly premiums on Medicare Part B, which covers medical supplies, equipment, and doctor's visits to treat your condition; and Medicare Part D, which is your prescription drug coverage.

Medicare Advantage plans. Also known as Medicare Part C, Medicare Advantage is similar to private insurance plans but is known to be more affordable. If your Medicare is paid through your Social Security benefits, you can take money out of your HSA account to reimburse yourself.

Pay for past qualified expenses

Seniors can also tap into funds in their HSA accounts to pay for any past qualified expenses they paid for out of pocket since they opened their HSA account. For instance, I opened my HSA account in my early 30s and I choose to pay out of pocket for the majority of my medical expenses. Once I hit 65, I can pay for qualified expenses in my mid-30s and not owe any taxes on my withdrawals (provided I've kept good receipts and documentation for all of those years).

Limitations once you receive social security benefits

Here's the kicker: once you start collecting Social Security benefits, you won't be able to put any money into your HSA. That's because once you receive Social Security benefits, you're automatically enrolled in Medicare Part A.

We know, it's not cool. Wouldn't it be great to enjoy all the tax benefits of contributing to your HSA? While there's a bill that's been introduced to remove the prevention of HSA individuals enrolled only in Medicare A, no movement has been made on it just yet.

If you've yet to receive your Social Security benefits, you'll want to contribute as much to your HSA as possible. If you're enrolled in your health plan as single, you can squirrel away up to $3,500 a year, and $7,000 a year if you're enrolled as a family. The more you save, the greater your tax savings.

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Whether it's for covering medical expenses, or planning bigger investments, our Future Healthy column will help support your path to retirement, no matter where you are on the journey. And for the latest info about your health and financial wellness, be sure to check out our HSA Learning Center, and follow us on Facebook and Twitter.

Retirement

Future Healthy: Paying for past expenses when budgeting your retirement

When you enter retirement, a major challenge is getting by on a fixed income. The general rule of thumb is that to maintain the same standard of living, you'll need anywhere from 70-80% of your pre-retirement income. Whether it's slashing costs on housing, food, or transportation, you'll most likely need to devise tactics to lower your monthly living expenses.

One way an HSA can help you budget in retirement is that you're able to take tax-free money out to pay for qualified medical expenses made since you opened the account. Think of it as going back in time, and (sort of) getting tax-free reimbursement on items you purchased years ago.

This could potentially free up some money for your current living expenses. Here are some ways to make the most of your HSA funds to pay for past eligible expenses:

Keep your receipts

You'll want to keep your receipts for all qualified expenses. If you don't have proof of purchase, you won't get your money back. A good rule of thumb: Keep all receipts and keep track of expenses, even if you aren't getting reimbursed in the here and now. You can manage receipts on your computer, or on a cloud storage platform such as Dropbox, Shoeboxed or Google Drive.

Some HSA administrators have tools for you to attach and manage your receipts from purchases you've paid for using your HSA debit card. You might be able to add qualified expenses that you can get money for at a later date.

If you end up switching administrators for any reason, make sure you have solid records of any transactions. That includes either an electronic scan and uploaded to the cloud, a physical receipt, or both.

Stay in the know on what's qualified

As you'll be able to get reimbursed for any qualified medical expenses since you first opened your HSA, stay on top of eligibility. By staying informed on what's considered an eligible expense, you can keep tabs of expenses and hold on to receipts when you first pay for something out of pocket.

What's deemed a qualified expense can change from year to year. By staying looped in on what's an eligible medical expense each year will reduce headaches, stress and confusion in the long run.

Know the rules and be on top of policy changes

Changes in legislation can affect what you can and can't do with your HSA funds. For instance, in 2018 there were a handful of potential policy changes that could have affected your HSA.

For instance, H.R.6311, which passed the U.S. House of Representatives but never was passed by the Senate, would have changed the rule that once you enroll in Medicare, you can no longer make contributions to your HSA account. There would have also been a bump in HSA contribution limits.

Ultimately, this bill never made it to law, but it did have widespread support and there's a chance we'll see it resurface again this year.

By knowing how your HSA can play into retirement, you'll have a better time incorporating the funds into your cash flow plan. In turn, it could save you big bucks.

Staying on top of eligibility, and keeping track of your expenses and holding on to receipts, and creating a spending plan that includes the money in your account, you can make the most of the funds in your HSA.

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Whether it's for covering medical expenses, or planning bigger investments, our Future Healthy column will help support your path to retirement, no matter where you are on the journey. And for the latest info about your health and financial wellness, be sure to check out our HSA Learning Center, and follow us on Facebook and Twitter.

Accounts

Compound It! Why I'm happy to go back to an HDHP

After two years of being on a high-deductible health plan (HDHP), in 2018 I switched over to a no-deductible health plan. With lower out-of-pocket costs, I was eager to make the most of my health insurance.

The thing was, 2018 turned out to be a year of health. No painful -- and expensive -- eye injuries, no trips to the ER. Just my annual checkup, routine lab work, and a single trip to urgent care to check out a suspicious-looking spider bite. (It turned out to be a false alarm.)

So for 2019 I'm back to an HDHP. This time around, I'm on a PPO. Here's why I'm happy to hop back to an HSA-qualified HDHP:

Triple-tax savings

One of the most attractive features of an HSA is the trifecta of tax savings:

  • The contributions you make to your HSA are tax-free. Just like how contributions to your 401(k) retirement account, traditional IRA or other interest-bearing account is tax-deductible. The lower your adjusted gross income (AGI), the lower your taxable income.
  • The interest you earn on the money in your HSA grows tax-free.
  • When you make withdrawals for qualified medical expenses, those withdrawals are also tax-free.

As a money nerd, I can attest that there are few things greater than getting a bit of a tax-savings advantage.

Use as an investment vehicle

Fact: You should be making health your top priority and not let the cost get in the way of your seeking treatment. What's the point of aggressively saving for your golden years if you aren't well enough to enjoy them?

But if you are healthy, and you have some money tucked away to cover your deductible should the need arise, then consider using your HSA as a way to save for retirement. (If you're an aspiring member of the FI/RE Movement, an HSA can even help you reach early retirement.) That's how I've decided to use my HSA funds for the time being. Some HSA administrators offer brokerage accounts, and you can choose to invest through these accounts.

Monthly premium savings

To me, the year I was on a non-HDHP plan felt a bit wasteful. I can only speak for myself, but every month as I paid my premium, I wondered if that money could be better spent elsewhere.

Because I'm single and healthy, the wee bit of money I'm saving each month on an HDHP can go toward my living expenses and saving goals. I'm about to tuck away a bit more each more toward retirement, an emergency fund, vacation, and what-have-you.

While I'm not exactly saving a small fortune on my health insurance premiums every month, my lowered living expenses helps me stress out less about my finances. And as a freelance writer, whose income can move up and down in any given month, it helps me freak out less about my income situation.

Who knows what the future might bring. I might one day opt to hop back to a non-HDHP and enjoy no annual deductibles. But for now, I'm more than happy to be able to contribute the $3,500 a year as a single person into my HSA.

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Compound It! is your weekly update of achievable, effective, no-nonsense HSA saving and investment advice, delivered by people who make it work in their own lives. For the latest info about your health and financial wellness, be sure to check out the HSA Learning Center, and follow us on Facebook and Twitter.

Eligibility

Wage Up! How one couple used their HSA to cover in vitro fertilization

When Laura Coleman and her husband got married in 2011, having children was at the top of their list. Coleman, who was 34 at the time, and her husband, who was 40, waited a year after marriage before trying. However, it turned out that her husband had infertility issues. They decided to try by route of in vitro fertilization (IVF).

This process can be costly. According to a data by FertilityIQ, the average cost of a cycle of IVF is $23,000. Freezing one's eggs is $17,000. And as a patient most likely undergoes multiple cycles, you're looking at a hefty medical bill.

Here's the good news: funds in your HSA can help foot the cost. Here's how the Colemans used an HSA to pay for in vitro fertilization:

How an HSA can help pay for IVF

Over the course of four years, Coleman went through three natural IVF cycles, one full cycle, and one transfer, which resulted in pregnancy. A natural IVF cycle is similar to stimulated or traditional IVF procedure, but without the use of drugs to stimulate the ovaries to produce multiple mature eggs. The grand total for all procedures, including medication, was $35,000.

The Colemans used their HSA to fund roughly half of the total costs. Here's how:

Save well ahead of time

The Colemans saved aggressively (the family max) for almost three years to save up for IVF. They were able to save $18,000 -- a little more than half the cost -- into an HSA fund. Her husband had a high-deductible health plan (HDHP) through his employer, and they contributed the yearly maximum for families. (FYI, the 2019 contribution limits are $3,500 for individuals, and $7,000 for couples.)

As both Coleman and her husband were working full-time, Coleman's entire paycheck went toward saving for IVF. "Besides helping us fund the IVF, it lowered our taxable income," says Coleman. "A big draw was the tax benefits." [NOTE: The money set aside for the HSA contribution is what lowers the taxable income, not the entire amount of the paycheck.]

Devise a bulletproof savings plan

Besides planning a few years in advance and giving themselves ample time to save for the procedure, here are some ways Coleman suggests you can fund your HSA for IVF:

  • You can roll money over from their traditional IRA to an HSA. You'll allowed to do this once in your lifetime. This transfer is tax-free.
  • Auto-save through your employer. That way a portion of each paycheck goes directly into you HSA account. Your employer might also contribute to your HSA. In Coleman's case, her husband's employer contributed $200 a year.
  • Transfer existing savings into your HSA, keeping in mind the annual limit.
  • Tuck away "extra cash" from Christmas, birthday money, gifts from friends and family, or from an inheritance. Or save part of your tax refund into an HSA.
  • Adjust your IRS tax withholdings to change your deductions. This will bolster your paycheck. That additional money can go toward your HSA.
  • Redeem credit card points as cash to fund your HSA.
  • Auto-save from your checking. If you're participating in your health plan as an individual, you'll need to save $67.30 to reach the annual max. If you are participating as a family, you'll need to tuck away $134.60 a week. If you find yourself falling behind, you have until April 15th of the following year to make contributions for the current year.

Know your eligible expenses

While her health insurance paid for some of the medical expenses, the rest were paid out-of-pocket. Here are the types of qualified expenses HSAs can cover:

  • Medication. Coleman paid for medication for her full IVF cycle, which was $4,000, from her HSA.
  • Fertility doctor bills. (It's always a good idea to have them write you a note that states that the procedures you'll undergo are medically required, to keep on file in the event of an IRS audit). .
  • Acupuncture. Acupuncture was recommended to Coleman to help the blood flow. She was pleasantly surprised that her HSA covered this as a qualified medical expense.
  • Egg retrieval
  • Ultrasounds after transfer
  • Pregnancy tests and ovulation kits
  • Prescribed fertility enhancements

Before you undergo the IVF process, look up to see what are qualified medical expenses. Coleman also suggests talking to your reproductive medicine doctor about all the fees involved. Don't forget to double-check to make these fertility doctor fees are considered qualified medical expenses through your HSA.

Unfortunately, Coleman had a miscarriage eight weeks after she got pregnant. However, she and her husband were smart enough to save for the entire process beforehand.

"If we had not saved beforehand, we would've experienced the sting of not getting pregnant and having a $17,000 bill," says Coleman. "And what if you do get pregnant, and want to be a stay-at-home-mom, but you now have a huge debt? That would limit your options."

By saving through an HSA account and a personal savings account, the Colemans were able to avoid digging a debt grave. If you're considering IVF, you can, too.

Family planning needs

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Whether you're spending steadily or saving for something big, Wage Up! is where we highlight the latest services available to buy with your HSA, every Monday on the HSA Learning Center. And for everything else about your health and financial wellness, be sure to follow us on Facebook and Twitter.

Retirement

Future Healthy: How an HSA is helping one woman achieve FI/RE toward early retirement

While the funds from an HSA can be used to pay for eligible out-of-pocket medical expenses, it can also be used for investing. In fact, it can help you be a bona fide member of the FI/RE (financial independence/retire early) movement. Here's the story of how one woman used an HSA to help her reach early retirement.

Jackie Cummings Koski is a certified educator in personal finance (CEPF) living in Cincinnati, Ohio. She first learned about HSAs back in 2008 when her employer started offering a high-deductible health plan (HDHP).

After poring over the details about HSAs, Cummings Koski (also the author of the award-winning Money Letters 2 My Daughter) decided it was a solid option for her and her 13-year-old daughter. Plus, her employer contributed $1,000 to HSAs that year. Cummings Koski was sold.

"I figured if I didn't like being on an HDHP, I could always switch back to a non-HDHP during open enrollment," says Cummings Koski. "It was a great opportunity to invest, plus the tax benefits were quite attractive."

Some side thoughts on HDHPs and eligibility

The first year she and her daughter were on an HDHP, Cummings Koski came close to switching back to a non-HDHP. Her child had a touch of asthma, and after an episode was in need of medication. When Cummings Koski called up the local pharmacy to call in the order, she was shock to discover the cost of the medication was $800.

It turned out that asthma medication wasn't considered preventative medication, so she had to pay for it out of pocket. While she asked for the prescription dosage to be cut in half – since that's what the prescription asked for – which brought down the cost to $400, she figured she would be switching to a non-HDHP the following year.

"At that point, I figured I was definitely switching," she added. But when the following year came around, it turned out that the medication her daughter occasionally needed was now considered preventative medication, and thus covered. She decided to stick with an HDHP.

Sticking to an HDHP turned out to be a wise choice for Cummings Koski and her family. Because they have both been in relatively good health, they haven't required extensive visits to the doctor nor ongoing medical treatments.

What's more, when she decided to work toward FI/RE a few years back, she worked the funds in her HSA toward her plans to retire early.

The amazing news? Cummings Koski plans in late 2019, at age 50, to retire with 30 times her annual living expenses of $45,000, which adds up to $1,350,000. The funds in her HSA make up 10% of her retirement savings, or $135,000. She shares strategies on how she went about investing the funds in her HSA to reach FI/RE, and how you can do it, too:

Max out your account every year

Cummings Koski was able to contribute the annual max for families because her household included her and her daughter. The HSA contribution limits for 2019 are $3,500 for individuals and $7,000 per family.

Pay for medical expenses out of pocket whenever possible

That way you can leave the money in your HSA to grow. "Even though you're paying out of pocket, be sure to keep receipts for these expenses because you may want to reimburse yourself later," she explains.

Start investing ASAP

A simple stock market index fund could give you about a 6-9% growth rate, points out Cummings Koski. "Remember: You're investing this for the long term, and might not touch it until much later." And while you're making contributions, knowing that you're reducing your taxable income for the current year could prove to be quite motivating.

Watch for fees

Some providers charge fees that will eat into the growth of your account. Fees might include a monthly account maintenance fee and investment fees.

If that is the case, Cummings Koski suggests considering switching to a provider that doesn't have a monthly fee and offers index funds or low expense ratio funds to invest in. "As these types of accounts have grown in popularity, the HSA industry has become very competitive," says Cummings Koski. "And that competition is a benefit to consumers."

Have a plan for your HSA funds in retirement

To make the most of the funds sitting in your HSA account, assign them a clear plan for your later years. Cummings Koski plans to use the $110,000 sitting in her account for her COBRA premiums in the first 18 months after she leaves corporate America.

After that, she plans to let the funds grow and use them for out-of-pocket expenses in retirement. "The one thing I know is that my health expenses will be greater in the future than they have been in the past," she remarks. " I view this account as another retirement account, specifically for inevitable healthcare needs that can be used before I hit 59 ½."

It's not always the case, but for most people who are retiring early, they're in their healthiest years and a HDHP with an HSA will make sense, says Cummings Koski. "As long as you qualify for an HSA you should contribute to this account." And if you use your HSA funds to invest, it could help you in your retirement years, whether you enter your golden years early or not.

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Whether it's for covering medical expenses, or planning bigger investments, our Future Healthy column will help support your path to retirement, no matter where you are on the journey. And for the latest info about your health and financial wellness, be sure to check out our HSA Learning Center, and follow us on Facebook and Twitter.

Taxes

Tax Facts: What's the "right" way to contribute to an HSA?

When I took the plunge into full-time freelancing in 2015, one of the first things I did was look at my health insurance options. I had just quit my full-time editorial day job with benefits for a one-year contract creating content for a major insurance company.

I'm generally someone who's mostly "risk-averse" and veers toward the unknown. So was becoming an independent contractor scary? You bet. Fortunately, being the hardcore, prudent money nerd that I am, I did my homework on health care insurance. After poring over policies I ultimately decided that an HMO with a high deductible was the option for me. Shortly thereafter, I opened an HSA.

What works best for me might not be the case for you. If you're on an high deductible health plan (HDHP) and opened an HSA, here's how to determine how much you should contribute: How much you earn doesn't affect how much you can contribute to your HSA in a given year. They're the same whether you earn $40,000 annually or $140,000. That said, how much you earn affects how much you can reasonably tuck away.

The HSA contribution limits for 2019 are $3,500 for those participating in the health plan as individuals, and $7,000 for those participating as families. If you're single like me, you'll need to contribute about $292 each month, or $67 a week to max out on your contribution limits. If you have a family, you'll need to squirrel away about $583 a month, or $135 a week.

Of course, it depends on your expenses and debt load. But if you have a higher income and/or lower expenses, you most likely can save more.

Budget accordingly

Income is one thing, but budgeting for your HSA contributions is another. I include my HSA contributions as part of my spending plan, and make auto-contributions every week. If you just opened an HSA fund, consider auto-saving each week or monthly, or aim to save a percentage of your income.

Let's say you're a self-employed freelancer. After you've covered your living expenses, aim to save 10% of "extra" money until you've hit the annual maximum contribution. You can also consider gradually bumping up your contributions throughout the year. For instance, if you're a freelancer and your income gradually increases, save $50 in January, $100 month in February, and so forth.

On the flip side, think about how having an HSA helps with your budget. As you'll be enjoying triple-tax benefits, it's worthwhile to stay up to date on eligible expenses. You'll also want to plan for the year ahead on how and when you'll be tapping in to your HSA funds. To help you budget, look at your medical costs in the years' prior, and the deductibles and copayments.

Understand your own risk tolerance

If you or a member of your household had to go to the ER, how would that set you back financially? Or worst, developed a condition that required ongoing medical treatment? If an unexpected medical expense could put you in the poorhouse, consider contributing as much as possible to your HSA.

And in all cases, if you're unsure, speak with a professional tax or financial advisor to help you make the best decision when it comes to your HSA.

Remember: Unlike an FSA, the funds in an HSA don't need to be used by the end of year. The money stays in your account for as long as it remains open.

Do you have dependents?

If you have a family, you'll also want to factor in their health care needs. When will they be going to the doctor for routine care? Do any of them have a medical condition that requires visits to a specialist, and prescription medication? Prioritizing everyone's health needs might feel like you're constantly spinning plates.

Invest or use it now?

I personally use funds in my HSA as an investment vehicle. That's because I have some money set aside in my emergency fund for out-of-pocket medical costs. If you decide to invest your HSA funds, you'll want to make sure you have enough stashed away to cover your deductible, copays, and in the case of a medical emergency.

Figuring out how much you can reasonably contribute to your HSA fund is different for every family and situation. It requires a dash of research, planning and some trial and error.

Risk-free, tax-free choices

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Tax Facts is a weekly column offering straight up, no-nonsense HSA tax and finance tips, written in everyday language. Look for it every Tuesday, exclusively on the HSAstore.com Learning Center. And for the latest info about your health and financial wellness, be sure to follow us on Facebook and Twitter.

Accounts

Wage Up! Tweak your HSA spending plan

Now that we're one month in the new year, how can you use insights on your family's health-related expenses from January to tackle your spending plan for the remainder of 2019? For starters, take a metaphorical magnifying glass for a closer look at patterns from the past to inform your spending.

Here are a few pointers to ensure the funds in your HSA are there when you need them most:

Anticipate your family's needs

Use info from prior months to gauge which times of year you'll most likely need to tap into your funds. Conversely, when won't expenses be as high? For instance, let's say that during the winter your household is "Flu Central."

But in the fall, trips to the doctor and the local pharmacy are normally less frequent. So, make sure you have enough set aside during the higher-spend months.

Instead of a monthly forecast, it might make more sense to map out the fam bam's medical needs quarterly. After all, the weather, travel plans, and activities during each season can affect our medical needs. For instance, your kids might get seasonal allergies during the spring, while in the fall they're homebound - and less inclined to suffer injuries like they would at summer camp.

By predicting these peaks and valleys, you can ensure you'll have enough funds in your HSA to spend on qualified medical expenses.

Schedule routine appointments at year's end

Because you just never know what medical issues might arise, consider scheduling non-urgent, routine appointments such as check-ups at the end of year. Besides the fact that these qualified medical expenses can most likely wait until later in the year, you can anticipate costs.

In turn, you can set aside funds to cover those costs accordingly. Besides copays for appointments, don't forget to factor in any fees for lab work, allergy tests, and other known expenses.

The end of the year is also a solid time to plan on to spend on essentials that can be purchased anytime - and therefore can wait. Think night mouth guards, eyeglasses, hearing aids, and what have you.

Create an HSA budget

With that knowledge in tow, create a spending plan for your HSA funds. Jot down anticipated expenses such as health insurance deductible, co-pays for routine visits, essential items, and things you'll know you'll purchase at specific times of the year, such as allergy medication (Rx required), sunblock for the warmer months, and flu medication for the wintertime.

It might be helpful to create a spending plan based on categories and tier them based on cost and importance. For example, Tier 1 could include deductibles, copays, and prescription medication. Tier 2 routine purchases on essentials such as glasses or contact lens solution. Your budget for Tier 3 could include over-the-counter medications or seasonal nice-to-haves, such as personal care health items.

Reassessing your spending plan using insights gleaned from months' past will help you keep your HSA account in the flush. And for whatever you anticipate spending your tax-free dollars on, make sure they're eligible expenses. Otherwise, prepare to pay income tax and penalties for the misstep.

Of course, there's not a one-size-fits-all approach to creating a spending plan for your HSA funds. By reviewing your budget at different points of the year, you'll be able to make adjustments so you have enough funds to cover your eligible expenses, and keep your family healthy.

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Whether you're spending steadily or saving for something, Wage Up! is where we highlight the latest services available to buy with your HSA, every Monday on the HSA Learning Center. And for everything else about your health and financial wellness, be sure to follow us on Facebook and Twitter.

Accounts

Compound It! Does an HDHP make sense if you're single?

Among my self-employed pals who bought their own health insurance, many chose policies with the highest deductible, and in, turn the lowest monthly premiums.

Their reasoning? "Oh, I'm young and healthy," they shrug. "I don't need to go to the doctor."

Heard this one before, right? That might be the case, but what if you're single? If you're unpartnered and opt for a high-deductible health plan (HDHP) just to save on premiums, you might want to think twice.

Can you cover the deductible?

This might seem obvious, but are you able to cover out-of-pocket expenses, including the deductible? For the unacquainted, in 2019 a qualified HDHP has a minimum of $1,350 deductible per year if you're flying solo, and $2,700 for families. The maximum you'll pay out-of-pocket annually is $7,900 for individuals, and $15,800 for family coverage.

Ideally you should have enough to cover at least your deductible. If you have some cash set aside, ideally in your healthcare budget, an HDHP could be a good fit for you. And besides deductibles, you'll want to look at the other costs, such as co-pays, cost of lab work, X-rays, and prescription medication. You'll also want to know what's free of charge in your plan, so you can budget accordingly.

In the four years I've been a freelancer, I've been on both a high-deductible health plan and one with a standard deductible. The irony? The years I was healthy, I had a standard deductible plan. And the years when I needed more medical attention were the ones I was on an HDHP. There's no telling what the future warrants. Regardless, you'll want to set aside some funds to use exclusively for medical costs.

Are you putting your health on the line?

If you have higher out-of-pocket costs, chances are you might postpone going to the doctor. In fact, according the Kaiser Family Foundation (KFF), in 2017 13.5 percent of American adults didn't see a physician because of the cost. Given the fact that many health plans offer free preventative car (i.e., an annual checkup and shots), if you need to see a specialist, you'll need to pay out of pocket before the insurance kicks in.

Are you protecting your greatest asset?

Your greatest asset isn't necessarily tied to your home, or are investments sitting in a brokerage account. It's you, and your ability to work. If you're not tending to your health, and investing in good food, exercise, rest, and what have you, you're jeopardizing your capacity to earn more. Being sick means more time taken off work, and spending more on medication and doctor bills.

What's more, the healthier you are, the more you have to look forward to once you're of retirement age. While preventative care might not save you money, it could improve your quality of life.

And when you're single, you don't have your spouse's income and benefits to rely on should you fall ill and aren't able to work for an extended period of time. Plus, the less you earn, the less you'll receive in Social Security benefits. That's even greater reason why you should stay healthy when you're single.

Will it cost more?

Within three months of being self-employed, I suffered an eye injury. Although it was a minor incident, I was out of work for about three weeks. Plus, I had to pay for two trips to the ER, plus a handful of specialists visits and eye medication. It probably cost me about $10,000 total, including the time I couldn't work. If I had a standard deductible plan, I would've easily saved a few grand. However, because I had some savings, I was able to seek treatment without hesitation.

Looking back, if I had opted for a standard deductible health plan, I would've probably end up saving more on the deductible and copayments. If you don't have any savings for your medical expenses, then you might want to consider hopping on a plan with a lower deductible and higher monthly premiums.

If you don't anticipate paying doctor visits, then a HDHP when you're single could make sense. But of course, you just never know. While I traditionally don't get medical treatment very often, a one-off incident created a deep dent in my wallet. Know the pros and cons of an HDHP can help you gauge whether it's the smart choice for you.

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Compound It! is your weekly update of achievable, effective, no-nonsense HSA saving and investment advice, delivered by people who make it work in their own lives. For the latest info about your health and financial wellness, be sure to check out the HSA Learning Center, and follow us on Facebook and Twitter.