Health Care Reform and HSA

If you own a Qualified High Deductible Health Plan (QHDHP) also known commonly as a HSA Health Plan, then you should be aware of some new changes taking place. The changes affect how and what you can use your HSA or Health Savings Account money for. You will no longer be allowed to purchase over the counter medications with a few exceptions being you have a prescription for that medication. One example is cold sore medication. If you have a doctor’s prescription then you may go use your HSA money, if not use your regular checking account or you could get dinged by uncle same. Your HSA money will still cover most of the qualified expenses it did in the past but it’s best to check out the IRS website for up to date info:
One thing to keep in mind is that early with draw penalties for non qualified expenses are up from 10% to 20%, but you shouldn’t concern your self with that as long as you’re not buying flat panel tv’s or getting your nails done courtesy of your Health Savings Account.
All in all, HSA qualified/QHDHP are gaining more popularity as people realize that they have the potential to keep more of their money in their pockets when it comes to health care costs. In a nut shell if used properly, you will give less to the insurance company but still have major medical coverage for those unexpected and financially devastating medical emergencies.
One more thing, if you never use your HSA money by age 65, just think of it as an additional retirement savings.