Introduction to HSA for Kids and Teens
This video explains the concept of an HSA in a simple, concise way for kids and beginners. It could be used by kids & teens to learn about a Health Savings Account, or used as a money & personal finance resource by parents and teachers as part of a Financial Literacy course or K-12 curriculum.
Suitable for students from grade levels:
- Elementary School
- Middle School
- High School
The topics covered are:
- What is an HSA
- HSA tax benefits / tax breaks
- Where does the money for a Health Savings Account come from
- What is the maximum contribution limit for an HSA
- Can the money in an HSA be invested in anything
- What can the Health Savings Account money be used for
- Are there any penalties for using money in an HSA for non-qualified expenses
What is an HSA?
An HSA or Health Savings Account is a type of tax-advantaged account that is used to set aside money to pay for qualified medical expenses.
In order to open an HSA, you need to have a high deductible health insurance plan.
The funds in a Health Savings Account never expire and simply roll over from year to year.
What tax benefits do HSAs offer?
HSAs offer a triple tax benefit.
You invest pre-tax money into an HSA – thereby reducing your taxable income, the money grows tax-free and withdrawals are also tax-free when you use the money for qualified medical expenses.
This is a better deal than other popular tax advantaged accounts.
Where does the money for an HSA come from? And is there a maximum contribution limit?
For 2022, the maximum HSA contribution for an individual is $3,650, and for a family is $7,300.
You can fund your Health Savings Account directly from your paycheck, or you can set up automatic transfers from your bank account to your HSA. Someone else – like a family member – can also contribute money into your HSA account.
Even if you switch to a lower deductible health insurance plan or otherwise no longer qualify for an HSA, you can still let the money in an existing Health Savings Account grow and withdraw it for qualified expenses – you just won’t be able to put new money into the account.
Can the money in an HSA be invested in anything?
The investment options within a Health Savings Account are determined by the HSA provider.
What can I use the money in an HSA for? Are there any penalties for using it for non-qualified expenses?
You can use the money for any qualified medical expense not covered by your high deductible insurance plan, including deductibles, copays, prescriptions, glasses and contact lenses, dental surgery, and more.
Download Transcript: Ideal for Use by Teachers in their Lesson Plan to Teach Kids & Teens
Podcast: What is an HSA / Health Savings Account
Fun, informative and concise episodes by a 10-year old, breaking down complex financial concepts in a way that kids and beginners can understand. Episodes cover personal finance topics like saving, investing, banking, credit cards, insurance, real estate, mortgage, retirement planning, 401k, stocks, bonds, income tax, and more, and are in the form of a conversation between a cowboy (a finance novice) and his friend, a stock broker. Making finance your friend, only at Easy Peasy Finance.
A little bit about me: I have been fascinated with the world of personal finance since I was 6! I love to read personal finance books, and keep myself updated on the latest by reading various personal finance magazines. My friends often ask me questions about finance because they find it complex and intimidating. That’s what inspired me to start my YouTube channel called Easy Peasy Finance when I was 8, and this podcast 2 years later.
Everything you need to know about HSA or Health Savings Account: What is an HSA, HSA tax benefits / tax breaks, Where does the money for a Health Savings Account come from, What is the maximum contribution limit for an HSA, Can the money in an HSA be invested in anything, What can the Health …