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Struggling with health care costs?

As a banker, one of the best pieces of advice I can offer you is to save now for future expenses. How much depends on how soon you get started.

As 2016 gets underway, one of the best ways you can do that is to open or add to a health savings account, a tool for which many of us qualify to help us save now for future health care expenses.

HSAs have been around for a few years, so you've probably heard about them and perhaps have even used one of these accounts. They're based on a simple concept, but they represent one of the best deals available to help pay for the cost of keeping us well and getting better if we encounter health problems. Here's how they work:

Individuals and families are allowed to set aside funds every year to pay for health and medical needs. Those needs are defined fairly broadly, including prescription medicines, some over-the-counter items, uncovered co-pays of doctor visits and other expenses.

The dollars you put in an HSA are pre-tax dollars. In other words, it comes right off your gross income, reducing your tax burden. Plus, the funds in your HSA grow tax-free forever. You don't pay taxes on the funds you put in the account or the interest they generate while they grow unused. However, you must use them for qualified health care expenses.

That makes an HSA a triple benefit for those who qualify. The only requirement is that your health insurance must be a qualified high-deductible plan. That means you pay a deductible of a sufficient amount before your insurance kicks in to cover medical expenses, including prescription drugs.

This year, the maximum amounts you may contribute to an HSA are $3,350 for individuals and $6,750 for families. Those 55 and older can contribute an extra $1,000, making their maximum contribution $4,350 for individuals and $7,750 for families.

Those amounts won't pay for every health need. But you can see that if you qualify for an HSA and you're not taking advantage of one, you're missing out on serious savings.

Opening an HSA is easy. They are simple bank accounts, usually checking accounts that come with their own checks and debit cards, allowing participants to make easy purchases and withdrawals. Instead of paying the drug store or the doctor's office with your regular check or debit card, you can use your HSA check or card. You also can pay as you normally do and then reimburse yourself. You'll want to keep records of what you spent, of course.

HSAs make a nice companion to high-deductible health insurance plans that more of us are using. High-deductible plans keep monthly premiums lower by requiring health care consumers to make choices — even shop around a bit — knowing that they will bear some of the cost of their care.

High-deductible plans mean many of us are paying more for our health care these days. But the HSA helps offset some of that burden. With health-care costs rising for nearly everyone, it's another reason why you should open an HSA if you quality and add to your existing account for 2016 if you already have one.

Unlike old "flex" health savings accounts you may remember, any money you put in an HSA is yours forever. There is no deadline for when you must use it or lose it. This makes HSAs particularly attractive to those who want to save tax-free for health-care expenses in retirement.

If you didn't contribute to your HSA in 2015, you still have until April 15, the deadline to file your 2015 income taxes, to put funds in your account and still get the 2015 tax break, as long as you already have an account open. The 2015 maximums are $3,350 for individuals (the same as 2016) and $6,650 for families ($100 lower than 2016). Like this year, those 55 or older also can contribute up to $1,000 more for 2015.

If you have questions about HSAs or want to consider opening an account, come in and talk to your banker. Bring information about your health insurance plan. Your insurance agent can also help. We'd love to help you get started saving now for health care expenses in the future.

Dale Lewis is president of Park State Bank in Duluth. You can reach her at or (218) 722-3500.