Open enrollment is here. You know, that time of year where you make choices about your benefits at work? One area that I've noticed that people may want to take a little more time in comparing their options is in the health insurance plan that they choose. As an Eli Lilly employee you can choose from two plans; a Health Reimbursement Account (HRA) or a Health Savings Account (HSA). My experience has been that most people use the HRA. But I think you should do some analysis and consider whether the HSA might be a good choice for you and your family.
What is an HSA?
You may have heard about the HSA, but maybe you're not sure how it works or how to use it. HSAs are relatively complex and can be confusing. Is it affiliated with health insurance? Does it have anything to do with my retirement? Is it a bank account, an investment account? It can be all of these things.
HSAs are available to those that have high-deductible insurance plans. The money in the HSA can be used to meet deductible and other out-of-pocket health care costs. The beauty is that the money you put in your HSA goes in pre-tax, like the money you put in your 401(k). Investment growth and interest are tax deferred, and withdrawals spent on qualified medical expenses are also tax free. I call this the trifecta of tax savings. This triple tax benefit increases your buying power compared to using after-tax money.