So you’ve started a new job or maybe it’s November and it’s time to pick your health insurance plan. There are five different options in front of you with ten different variations. If you’re the average #millennial with little to no health expenses I may have just the plan for you. In this post I will introduce you to a health savings plan, otherwise known as an HSA.

For most twenty-somethings that do not have high annual health expenses this is the plan for you. Especially if the only thing you go to the doctor for is your annual physical and to pick up some prescriptive medications. So if your medical expenses are low and you want to save some of the money that is paying for your health care today for tomorrow you may want to consider enrolling in a HSA.

Let’s dive a bit deeper, into what exactly this plan is and why it gets me so excited. This is a high deductible plan, which means you will pay more out of pocket before your insurance starts covering a larger percentage of your medical expenses. The trick is the money you use to pay your deductible, prescriptions, and co-pays can come straight out of your HSA.

Unlike a flexible spending account (FSA) that is included with some insurance plans, there are no use it or lose it rules with the HSA.

The money in your HSA is yours, it never ‘expires’ at the end of the year and it even goes with you if you leave your job.

This means when you do need the money, later in life, you will have it. Thus giving your rainy day fund a little breathing room, since you’ll have a savings account dedicated to healthcare expenses.

Believe it or not, it gets better when we start discussing the tax benefits. When you contribute to your HSA, it lowers your taxable income. The money that is contributed both from your employer and yourself can grow in this account tax free and when I say grow I mean you can actually invest the money in your HSA. Lastly, when the HSA is used to pay for eligible healthcare expenses, it can be used taxed free.

So now that we’ve covered the so-called ‘perks’ of this account. Tactically, you may be wondering how do I enroll and make the most out of this account? So there are specific time periods when you can enroll or change your insurance plans. These are typically at the end of each year. You can trigger a special enrollment period when you have a qualifying life event such as getting a new job, having a baby, getting married etc.

Once you are enrolled your employer will make an annual contribution each year and you can set up contributions directly from your paycheck. This way your contributions can also lower your taxable income. As of 2017, your annual contributions to an HSA are limited to $3,400 as an individual and $6,750 as a family. You should receive a debit card in the mail a few weeks after enrolling. This debit card can be used to access the funds you have saved in your HSA. Just make sure you keep the receipts of your purchases in case you ever get audited. This way you can validate that the account was used for eligible healthcare expenses.

So give your rainy day budget some breathing room and make space for your health savings account. Remember this account can be used at any time, even if you enrolled when you were in your twenties and don’t withdraw until you’re in your eighties for that new pair of dentures. So bookmark this page and remember to go with the HSA during your next insurance enrollment period.