Family Health Insurance Cost : Consider a Health Savings Account (HSA)

Choosing a health savings account (HSA) can offer benefits and savings on family health insurance cost. These accounts are similar to an IRA except their sole purpose is to cover medical expenses. The deposits made to the health savings account is deductible within certain limits and the earnings from the HSA are tax-free. All distributions that are used to pay medical costs are also tax-free.


To be eligible to establish a HSA, individuals are required to have a health plan with a high deductible and must not be covered by any other plans that are not HDHP except when coverage is permitted or is for accidents, dental care, long-term care, vision care or disability.

Qualified Contributors

Individuals who are eligible can make contributions to health savings accounts and employers. Individuals can also contribute for eligible family members. The individual who holds the account receives the deduction for the contributions to their HSA, no matter if another family member contributes to the health savings account. When an employer contributes to a HSA, these contributions are excluded from the income of the employee as well as distributions used for contributions are tax-free for qualified medical expenses.

Benefits of an HSA

HSA contributions can be 100% deducted from taxable income. When paying for qualified medical expenses, there are no taxes or penalties. High-deductible health savings plans usually offer lower premiums than plans with lower deductibles. Money in the HSA accrues interest as well is tax-free, which can provide additional savings on family health insurance cost.

Medical Expenses That Qualify

These savings accounts can pay for many different medical expenses that include long-term care, vision care that includes lasik surgery and glasses, prescription drugs and over-the-counter drugs, deductibles for health insurance plans, co-insurance and co-pays. It also covers medically related lodging and transportation as well as psychiatric and other psychological treatments.

Contribution Limits

The yearly limit for contributions can not exceed $6,150 for family coverage and $3,050 for individual coverage. This includes personal contributions as well as employer contributions.

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