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The National Business Group on Health forecasts that providing employees with health care will average about $15,000 per employee in 2019.

A High-Deductible Health Plan (HDHP) is one way employers seek to lower those costs. HDHPs offer employers lower premiums, but employees may pay more. You still save on out-of-pocket costs because your provider and your insurance company continue to negotiate those costs rather than charging market rates.

Whether your employer provides an HDHP or you obtain one on your own, your HDHP may qualify for a health savings account (HSA). The 2019 HDHP minimum deductible required to qualify for an HSA is $1,350 for individuals and $2,700 for families.

Why Open an HSA?

Combining an HSA with your HDHP provides more health care savings, some tax-related. You can deduct HSA contributions on federal income taxes and on many state taxes. Interest earnings are tax-free, and the funds you withdraw to pay for qualified health care also are tax-free. You may use your HSA funds only for qualifying health care expenses. Qualifying health care generally includes expenses to prevent or cure disease, to relieve disease symptoms, and to treat the effects of disease.

HSA Limits

The 2019 HSA individual contribution limit increased from $3,400 to $3,500 for individuals and from $6,750 to $7,000 for families. The HDHP maximum annual deductible and other out-of-pocket expenses in 2019 is $6,750 for individuals and $13,500 for families.

Due to employers' efforts to cut their health care spending and the nation’s reliance on high-deductible plans, HSAs make sense. Your account bears interest and, with certain limits, your funds roll over from one year to the next.

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This article and any information contained herein is intended for informational purposes only and should not be construed as legal advice. The publisher will not be responsible for errors or omissions or any damages, howsoever caused, that result from its use. Seek competent legal counsel for advice on any legal matter.