6 Benefits of choosing an HSA plan

A health savings account can help you lower your taxes and pay for health care expenses tax free!

HSA plans in Maine are only available with high-deductible health plans.

You can use HSA funds to pay for eligible health care expenses and for out-of-pocket costs your health plan doesn’t cover.

1. Save on taxes

Your HSA contributions go into your account before taxes. The money you save to your HSA lowers your taxable income – so you may pay less in taxes.


You’re a young self-employed professional
Your tax bracket: 24%
Your HSA contribution: $200/month ($2400/year)
You save: $576 year in taxes (24% of $2400 = $576)

You’re a retirement-bound professional 
Your tax bracket: 35%
Your HSA contribution: $300/month ($3,600/year)
You save: $1,260/year in taxes (35% of $3,600 = $1,260)

Related article: Your HSA and retirement: Top 3 tips to maximize your savings


2. Save on your medical expenses

Use your HSA funds to pay coinsurance, copays and your deductible (all tax-free). You can also use HSA funds to pay for some costs your plan doesn’t cover, like dental care, orthodontia contacts and eyeglasses.

If you use HSA money for non-eligible expenses, you will pay taxes and a penalty on the money you took out . The penalty no longer applies starting at age 65.

3. Your money works harder in an HSA

  • Money in your HSA account earns tax-free interest.
  • Any unused HSA funds roll over to the next year.
  • You can spend your HSA dollars on eligible health care expenses, or save and investment them for the future.

4. You are in control

You decide when and how to spend or save the money in your HSA. The money is yours forever. It doesn’t expire, and you can take it with you if you change jobs or switch to another high-deductible health plan.

5. An HSA is an investment

You can invest a portion of your HSA balance in mutual funds, stocks and bonds. Generally, this option is available only when you maintain a certain account balance.

6. Save for retirement

You can use your HSA to save for retirement. At age 65, you can use the funds for any purpose without a penalty. The money you take out to pay for eligible health care expenses continues to be tax free. You also can take money out for other reasons without paying a penalty.

Related Story: 4 Tips on How to Maximize your Savings in Retirement


Are you ready to sign up?

Here are the steps to take:

  1. Get a quote here at MaineInsuranceOptions.com 
  2. Consult with a trained advisor. If you have questions, set up an appointment with an agent or broker in your area who will be able to help you sort through the available options and figure out which one will best meet your needs. (Click here to get help.)

Should I just let my existing plan renew for 2021?

If you’re already enrolled in a Marketplace health insurance plan through the marketplace, can you just let that plan automatically renew for 2021? In most cases, yes, assuming your plan will still be available next year.

You should have received a letter in the mail with details about your plans changes for next year along with your new premium cost.

If you are getting a subsidy (or tax credit) that lowers your premium, you should update your application with your income to make sure the subsidy stays in place.

But relying on auto-renewal is not in your best interest. No matter how much you like your current plan, it pays to shop around during open enrollment and see if a plan change is worth your while.

Here’s why:

You won’t be able to pick a new plan after your coverage is auto-renewed.

The auto-renewal process happens right after December 15, for people who haven’t manually renewed or selected a new plan. That’s after the end of open enrollment, which means you won’t get a chance to change your mind if it turns out that your plan’s after-subsidy premiums are increasing or the provider network is changing.

Who can help me enroll in a health insurance plan for 2021?

Health insurance is complicated, and many people want or need personal assistance with the application process and with ongoing insurance utilization questions. To fill this need, there are a variety of agents and brokers statewide who are trained to guide people through the process of researching and enrolling in health plans, and some can provide ongoing support after the plan is purchased.

Insurance brokers and agents

Insurance brokers and agents who are certified by the exchanges can also explain plan details and help consumers determine subsidy or MaineCare eligibility, but – and this is a key difference – they can also make plan recommendations based on a client’s particular situation.

Agents and brokers continue to assist their clients after the plan is purchased, helping them sort out questions and problems regarding billing, utilization, claims, and appeals. Brokers and agents also generally carry errors and omissions insurance, and are licensed by their state department of insurance (this is in addition to their certification with the exchange; Navigators and CACs are trained and certified by the exchange, but are not licensed by the state insurance department).

For health insurance purposes, independent agents and brokers are virtually the same thing, although brokers may represent more carriers or offer different types of insurance products.