Health Savings Accounts: Used properly, a secret healthcare weapon for low-income families

For many people on a tight budget, the notion of a Health Savings Account (HSA) literally feels like something which is a pipedream.  These accounts divert money which is usually needed for essentials to health care needs and while these accounts are tax deductible, the vast majority of people who benefit from this deduction enjoy more middle-class oriented deductions such as mortgage interest and business tax credits, all of which bump the deduction total over the already-high standard deduction offered for all files by the Internal Revenue Service. 

Breast pumps are listed by the IRS as an
eligible purchase for Health Savings Accounts.

But what if there is a genuine benefit to families for these HSAs?  Thanks to tax regulations published by one website, growing low-income families may have finally found the ticket they’ve been looking for.

According to a story published on MobileLikez, IRS guidelines already allow for mothers to use HSA accounts to purchase lactation equipment and coaching services for the purposes of breastfeeding.  Low-income families, statistically more prone to pregnancies than middle and upper-income families, can benefit greatly from the benefits of a properly administered HSA.  These benefits include:

A debit card (in most cases):  Most HSAs (not all, consult your plan in advance) offer debit cards which draw from the available funds on the account.  This is not only an easy-access feature; it also provides the HSA administrator with the necessary purchasing data to create an itemized list for both account holder and the IRS at tax time.  These account administrators must provide account holders, upon request, with a list of all qualified medical expenses.  Most plans provide these lists on their websites.

Plans such as OptumHealth offer HSA Debit Cards
which provide enhanced access to funds.

Pre-tax deduction:  One of the beauties of these accounts is that the money deducted from a paycheck is done in manner which reduces taxable income, thus reducing the tax burden which reduces the net pay amount.  While this may be pennies on the dollar, the fact that these funds are diverted to a dedicated fund is often a blessing in disguise, which leads to the next point.

A fixed budgeted account:  Families who use the itemized lists provided by administrators often discover that many things, such as hearing aids, nursing care, and eyeglasses, are listed as eligible purchases.  Even more a relief to many limited-budget families is when they discover they have some money on these cards for such things as dental and vision expenses, items which would, in many cases, break an already strained budget.  From personal experience, my budget was once strained to the breaking point prior to an emergency dental visit, but I had discovered I had nearly $200 on my HSA account, and I used my card to pay for an emergency extraction.  It was a godsend, and it was an eligible expense.  Win-win.

Unpublished discounts:  Many HSAs have partnered up with a variety of providers to offer discounts, often rather significant, on services ranging from gym memberships to smoking cessation programs to daycare and elder care services.  While many of these discounts are useless to low-income families, some plans offer links to websites which not only offer service discounts, but product purchase discounts as well.  In addition, some HSAs have partnered with drug discount plans to offer significant savings on prescription drugs through affiliate programs, which can cut a medicine bill by hundreds and, in rare cases, thousands of dollars.  This can be a lifesaving aid for limited-budget families who need cutting-edge medicines once out of reach financially.

The website momanddadmoney offers a detailed list of the best Health Savings Account providers, with links and comparisons of what each account plan offers.  A disciplined, well-planned use of an HSA can provide limited-income families and individuals with a safety net which would otherwise not exist.  As always, such plans must be used effectively, within IRS guidelines and are always full of loopholes and exceptions.  Be sure to check with your benefits administrator before making a purchase you are unsure about.