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3 Ways to Save Money on Health Care


Most people spend four hours selecting a new cellphone, but only about 18 minutes reviewing their health care options each year.

Those who take advantage of employer-provided insurance will receive communications from your workplace. Those who are self-insured are encouraged to visit, or speak directly with a preferred provider.


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If you decide to skip health care open enrollment in any given year, your existing coverage will likely carry over to next year at revised prices. Dedicating a little more time to your health care selection process can help you save money and secure your overall financial fitness.


Save money with health savings accounts (HSA)

Pre-tax contributions can be used to pay for medical, vision or dental expenses. You must be enrolled in a high deductible health plan. Distributions for qualified expenses are untaxed. The benefits of using health savings accounts are as follows:

  • Triple tax savings – Contributions, earnings, and qualified health care expenses are not subject to federal or state income tax in most states. Contribution limits vary by state, family size and age.
  • Interest and investment benefits – Contributions and interest earned in HSAs can be invested in mutual fund families once minimum balance requirements are met. Consult a fee-only adviser for additional information.
  • Keep your money – Because you own the HSA, you can retrieve or access those funds if you change jobs, change health plans or retire.
  • No use it or lose it feature – Balances in your account at year-end, roll to the next year.
  • Age 65 comes with a benefit – Persons ages 65 and older can use HSA savings for non-eligible expenses, penalty-free, but you will have to pay income taxes on all deducted funds.
  • No time limit on reimbursement – You do not have to reimburse yourself for a qualified medical expense during the year the expense occurs. Reimbursements can be awarded in any year so long as receipts are provided. By not seeking immediate reimbursement, your contributions and earnings in your investment account should grow faster.


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Save money with flexible spending accounts (FSA)

Although your employer owns flexible spending accounts, these funds can be accessed to pay out-of-pocket expenses for health care or dependent care of a qualifying adult who meets specific IRS guidelines.

HSAs may be accessed to pay out-of-pocket medical, vision or dental costs.  You are spending the money anyway, so you might as well spend it tax-free.

Contribution limits apply on a per-plan basis. If you and your spouse work for the same company, each of you could contribute up to the maximum allowed. Unused funds are forfeited unless the employer allows a rollover capped at $550.


Manage your costs and protect your estate by updating your health care profile

Life-changing events such as the birth or adoption of a child, death of a spouse or dependent, marriage, divorce, or change in your spouse’s employment status will impact your benefit selections, costs, and eligibility. A good practice is also to be sure the information for your beneficiaries is correct in your life insurance policies. If you have not already done so, this is a great year to establish a health care power of attorney and payable on death bank accounts.

As with all suggestions, the final choice to incorporate these options is yours. If you decide to do nothing, you are giving the IRS more of your hard-earned dollars and less prepared for life’s future events.


Al Riddick is president of Game Time Budgeting, an award-winning financial fitness company that assists others in developing behaviors to improve their short- and long-term financial outcomes.  He is the author of The Uncommon Millionaire and two workbooks: The Uncommon Millionaire’s Guide to Financial Fitness and Money $mart Teens. Also, Al has been featured on NerdWallet, in Black Enterprise and Money magazines, on radio and on ABC, CBS and NBC affiliated television stations.


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