health savings accounts


If you’re looking for a smarter way to invest for the future, consider self-directing a
Health Savings Account (HSA) which offers tax benefits, portability, and flexibility you can benefit from in the years to come.

IRA Innovations can help you set up an HSA as the administrator of your account. You will have the opportunity to self-direct your funds by investing in the full breadth of assets allowed by the IRS.  This provides the potential to earn even more for qualified medical expenses.

What is a Health Savings Account (HSA)?

HSAs were created to help individuals and families save for qualified medical expenses on a tax-free basis. Contributions are generally made with pre-tax dollars, and you can deduct them from your gross income on income taxes each year. Your qualified withdrawals will be tax-free as well. Qualified withdrawals include medical expenses, such as  prescriptions, eye care, dental care, and some over-the-counter medications.

To qualify for an HSA, you must have a high deductible health plan (HDHP), which is a health insurance policy that features a higher annual deductible than traditional health plans.

One of the benefits people often love most is that an HSA is not a “use it or lose it” account. Unlike a flexible spending account, you do not have to use your contribution amount in any particular year. Instead, the funds remain in your account from year to year and continue to accumulate until you need them.

What are the Benefits of Self-Directing an HSA?

The choice to self-direct is unique because it allows you to make decisions about which assets to invest in with your account. While most HSAs provide only savings or money market options, with a self-directed account, you can invest in real estate, private companies, precious metals, lending money in the form of a promissory note, and other investments as part of your Self-Directed HSA. 

You have complete control and may direct your funds into investments that you are familiar with and the ones you feel confident have the potential to offer maximum growth. When it comes to medical expenses, this will help ensure you have financial security when you need it the most.

There are several other advantages of HSAs as well, including:

  • You do not pay taxes on the earnings, and withdrawals are tax-free as long as they are used for qualified medical expenses. (In general, any funds you withdraw for non-qualified medical expenses will be taxed at your income-tax rate, plus 20% if you’re under 65.)
  • An HSA is portable, which means that it will stay with you if you change employers or leave the workforce.
  • You have a variety of self-directed options for alternative investments, such as real estate, private companies, precious metals, lending money with promissory notes, and more.

Are you a good candidate for an HSA?

You may be a good candidate for an HSA if you meet the following conditions:

  • You have a high-deductible health plan
  • You do not have any other healthcare coverage
  • You are not enrolled in Medicare
  • You are not claimed as a dependent on another person’s tax return

The amount you can contribute depends on whether you’re contributing on behalf of yourself or your family. The 2020 HSA contribution limit for single coverage is $3,550, and the limit for family coverage is $7,100.

Much more information about the specifics of qualifying for HSAs can be found on the IRS website.

Set up an HSA with IRA Innovations

We would love to work with you on setting up a Self-Directed Health Savings Account. You can get the process started quickly and easily on our website, and contact us for more information. If you would like to learn more about the specifics of health savings accounts, read more in IRS Publication 969.

Let us know if you would like to learn more about Self-Directed Health Savings Accounts and other types of IRAs from IRA Innovations.

IRA Innovations provides self-directed retirement account administration and education in Birmingham, AL, Tuscaloosa, AL, and Nashville, TN. As the experts when it comes to non-traditional investments including real estate, private equities, precious metals, lending money, etc., IRA Innovations can provide the necessary tools and information to get started with a Self-Directed IRA. IRA Innovations does not endorse any products or sell any assets. IRA Innovations does not provide tax, legal, or investment advice. Please consult your legal, tax, or financial advisor for any advice you might require.