Women, we have a lot on our plates. There’s the day-to-day tasks of running our careers and/or households, plus the second shift work of caring for our families, communities, pets, and more. These days, if your work desk is in your home, the lines can easily blur. When your to-do list is long, you may find it challenging to pause and plan for your healthcare, let alone retirement. That’s why I’m breaking down what you absolutely need to know about Health Savings Accounts (HSAs). I’m here to tell you that it’s vital that you make time for you—your health and your finances—and I want to make it as simple as possible.
What’s the situation?
Why do I think it’s important to simplify how you pay for healthcare? Well, we know that women have a lot of tasks to complete and not a lot of extra time. We also know that according to the Census Bureau, half of women in the 55 to 66 age bracket have no money saved for retirement.1 None.
Then, we add in record-breaking inflation, the changing landscape to women’s reproductive rights, rising medical costs, and we have a very complex situation. But it’s not too late. When you have an HSA, you’ve got tools at your disposal to help reach your goals.
You’re not alone in your journey toward financial security and managing healthcare expenses. Employers are paying close attention to how benefits in general, and HSAs in particular, can support women employees like you. Striving to ensure benefits packages support an inclusive company culture is a top priority of many workplaces. For example, in a recent survey of HealthEquity clients, 91% of respondents view diversity, equity, and inclusion (DEI) programs as key to their organization’s success. And 65% of employers with DEI programs in place use benefits design—the type and quality of benefits offered—to reinforce their inclusivity efforts.
If you’re a woman wanting to take control of your finances or an employer looking for ways to help your female employees plan for their healthcare, read on.
First, what are the benefits of an HSA?
HSAs provide support in helping you manage a wide range of healthcare issues, including family planning and reproductive health. HSAs let you use your money, tax-free, to pay for qualified medical expenses, which encompass thousands of items and services.2 That means when you contribute money in your HSA, you get more spending power than you would with taxable income. Anything you don’t use right away will roll over into the next year. Best of all, the money stays with you regardless of your employer, which makes it a great addition to your long-term strategy. Let’s go over some of these benefits in detail.
1. Use your HSA to help offset rising healthcare costs
HSAs are a health savings account, that, paired with a qualified high deductible health plan typically results in lower health plan premiums. This allows you to have more freedom in how you pay for your healthcare.
As a woman, your health is important. From regular checkups to planning for a family, healthcare expenses can add up. Some experts say that prices will likely increase moving forward, which can lead to higher insurance premiums and more expensive services for both consumers and employers in 2023.3 If you’re enrolled in an HSA-qualified health plan, make a contribution to your HSA now to help offset rising future costs.
2. Take care of your reproductive health
You may already know that your HSA can help you cover the cost of medical items such as doctor visits, hospital stays, and prescription medications. But did you know your HSA can help you pay for a range of various qualified medical expenses before meeting your deductible? This includes women’s wellness checkups, mammograms, and more. You can also use your HSA towards these feminine care products:
● Over-the-counter (OTC) medications for pain related to menstruation
● Tampons, pads, liners, and even menstrual cups
● Birth control and other contraceptives (including “Plan B,” unless otherwise restricted by the employer’s plan documents)
● Abortion related services (in states where abortion services are legal)
3. Cover costs associated with family planning.
If family planning is on your radar, you’re in luck. You can use your HSA dollars toward a wide range of prenatal care, including:
● Infertility treatments, such as tracking monitors
● Home or in-office pregnancy tests
● In vitro fertilization (IVF) treatment
● Doula and midwife services in some cases (and a Letter of Medical Necessity may be required)
● Prenatal supplements
● Labor and delivery
Recently had a baby? Use your HSA to cover the costs associated with your post-natal care, including these items and services:
● Breastfeeding supplies like eligible breast pumps, pads, storage bags, lanolin, etc.
● Mental health therapy (a Letter of Medical Necessity may be required)
● Lactation consultants
There are even more products and services covered by HSAs. Even services like massage and acupuncture can often be covered by your HSA if you have a medical reason for it. See the full list of qualified medical expenses. Wherever you’re at in life, know that you can use your HSA funds to pay for the care you need.
4. Get ahead with your retirement
You might have heard it before—women face a tougher financial road in retirement than men. In 2021, Even though working women were more likely to participate in their employer’s retirement plans than working men, women entered retirement with $70,000 less on average.4
There’s a lot that plays into this disparity, and one of the biggest reasons is the stubborn wage gap. Among men and women working full-time in the US, women earn an average of 80 percent of what men earn.5 So even if women put the recommended amount of money into their retirement accounts, they’ll end up, on average, with fewer funds than their male coworkers. Happily, recent passage of the Secure 2.0 Act of 2022 may help reverse this trend by offering improved retirement savings options, including with a wide variety of items to encourage savings and build in more flexibility as you save for retirement.6
If you’re curious what you can do to ensure your finances are sound in your golden years, consider your HSA. When compared to other retirement accounts, your HSA provides more tax advantages and is more flexible overall for your medical needs. If you plan to pay for your routine qualified medical expenses without dipping into your HSA, your money can grow for decades and serve as a nest-egg dedicated for your long-term care needs as a woman.7
5. Cover travel-related healthcare expenses
Occasionally, you may need to travel to another state to get the healthcare you need. In many cases, your HSA can help you pay for those transportation expenses, as long as you’re traveling exclusively for medical care. These qualified expenses can include:
● Plane, train, and ferry tickets
● Rental car expenses
● Bus, taxi, and rideshare
● Parking fees or tolls
● Ambulance services
Keep in mind that rental car expenses are limited to the usage related to the medical appointment or other care. Or, instead of car expenses, a standard mileage rate (22 cents per mile beginning July 1, 2022 and continuing in 2023) for use of a car to obtain medical care is allowed. It’s best to consult a tax advisor before making travel plans, just to be on the safe side.
6. Create a healthcare emergency safety net
You never know when you might need to make a trip to the emergency room or get additional health scans. Maybe you already have a rainy-day fund in your personal savings, in which case, kudos to you! But whether you have an emergency safety net or not, you can use your HSA for those out-of-the-blue qualified medical expenses. And, since the money in your HSA rolls over each year, you can keep saving your tax-free dollars all the way up into retirement. The money you save also stays with you. HSAs are portable so if you start saving now, that money will be yours if you switch job, leave the workforce, or retire.
7. Use your investing power to raise your earning potential
Women are better investors, according to a recent Forbes study, but they generally invest less than men. If you’re looking for ways to increase your earning potential, consider investing your HSA funds.8 It’s easy: your HSA lets you invest money and potentially build on those funds as you grow your retirement nest egg. Depending on your HSA plan, you may need to reach a minimum threshold to be able to start investing. When your cash balance exceeds that threshold, you can purchase investments with any funds over -the threshold amount. To learn about your plan’s threshold, contact your HSA provider. If you have your HSA with HealthEquity, visit the Investments section of your HealthEquity online account or contact member services for assistance.
Be sure to build enough savings to cover your typical medical costs, with some extra emergency funds set aside before you start investing. More than anything, I hope you take a few minutes to decide how you’ll invest in your HSA this year.
Feel empowered for the future
I’m passionate about helping working Americans make progress toward financial security. Everything I covered above will help you plan ahead and make the most of your HSA benefits. I encourage you to make the most of the resources we offer at HealthEquity to grow your confidence and your ability to build long-term savings.
HealthEquity does not provide legal, tax, financial or medical advice. Always consult a professional when making life-changing decisions.
2HSAs are never taxed at a federal income tax level when used appropriately for qualified medical expenses. Also, most states recognize HSA funds as tax-deductible with very few exceptions. Please consult a tax advisor regarding your state’s specific rules.
7After age 65, if you withdraw funds for any purpose other than qualified medical expenses, you will be subject to income taxes. Funds withdrawn for qualified medical expenses will remain tax-free.
8Investments are subject to risk, including the possible loss of the principal invested, and are not FDIC or NCUA insured, or guaranteed by HealthEquity, Inc. Investing through the HealthEquity investment platform is subject to the terms and conditions of the Health Savings Account Custodial Agreement and any applicable investment supplement. Investing may not be suitable for everyone and before making any investments, review the fund’s prospectus.
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