HSAs (health savings accounts) are extremely popular. These so-called consumer-driven health plans have registered over 2.5 million Americans since their launch in 2004. However, HSA plans are not suitable for everyone.

Here are some tips to help you decide if an HSA is right for you and your family.

1. For many people, an HSA plan may reduce healthcare expenditures by as much as 40%.

Some consumers, though, will not see any net savings. People who pay all of their own health insurance premiums, such as the self-employed, who are generally healthy and have low medical costs, are the most likely to save a lot of money.

2. A health-savings account restores personal autonomy.

Individual customers regain control of their health care with an HSA plan. This also implies that each person must take greater responsibility for his or her own health-care choices. This self-reliance strategy is not always popular or acceptable for everyone, especially for individuals who have become accustomed to HMO-style "co-pay" insurance.

3. Health savings accounts help you save money on taxes.

Every dollar you put into an HSA account is deducted from your taxable income in the same way that money goes into a regular IRA account, whether you spend it or save it. Interest and investment profits grow tax-free in an HSA, just like they do in a regular IRA. 

Withdrawals are tax-free when used to pay qualified medical costs, unlike an IRA. In many cases, new account users can nearly completely fill their HSA with money saved on premiums from a previous, higher-cost plan. By putting all or a portion of those funds into an HSA, the account user gets immediate, extra savings in the form of lower taxes.

4. Before you can create a health savings account, you must first have a fully qualified high health insurance policy in place.

One of the most common misunderstandings regarding HSA plans is that any insurance coverage with a high deductible qualifies the policyholder to open an account. The IRS regulations, on the other hand, are extremely precise. It's not enough to have a policy with a "large deductible." 

It's critical to make sure you're covered by a properly certified insurance. Working with a knowledgeable and fully registered health insurance broker who has expertise marketing properly qualified HSA plans is your best choice.

5. To be eligible for an HSA-qualified health insurance coverage, you must be insurable.

Most consumers will need to transfer health plans to become HSA-eligible since they do not have a properly qualified high deductible insurance coverage. The new high deductible policy will be individually insured by an insurance provider unless coverage is granted under small group reform legislation (usually businesses with 2-49 employees). As a result, some "pre-existing" conditions may be excluded from coverage. In return for somewhat higher rates, certain businesses may choose to cover certain "pre-existing" conditions.

Unfortunately, some medical problems make a person uninsurable (for example, diabetes, Chron's disease, heart attack, and so forth). Another reason to rely on an expert health plan broker is that underwriting standards differ by state.

When managing existing medical expenditures is more essential than saving money on medical insurance premiums, you should not convert to an HSA plan. If you're in the middle of a medical treatment, after a significant health condition has been detected, or if a family member is pregnant, don't switch health insurance.

In general, qualifying is quite simple, with no medical examinations or other requirements. Most insurance firms that provide HSA coverage will issue a policy based on your application responses, maybe with a follow-up phone interview. Medical records may be sought in specific instances, and employers always maintain the right to order a paramedical exam.

6. While HSA insurance rates are generally inexpensive, they are not always as low as you would think.

This occurs for one primary reason. The underlying insurance policy is, simply put, a health insurance policy. The insurance business must compensate for the risk it is carrying beyond the deductible amount, which it does by collecting premiums, even though it has a "high" deductible as required by law. 

Many employers provide insurance with a "single deductible" that everyone in the family contributes to. Rates for a 5000 family deductible plan with 100 percent coverage after the deductible are often comparable to premiums for a 2500 "per person" deductible plan with 80/20 coverage after the deductible with those policies.

Lower premiums are just one part of the net cost savings that an HSA plan may provide. The benefits of lower taxes, made possible by the tax-deductible contribution to the HSA account, are factored into the low net cost of an HSA plan. If getting the lowest possible gross premium is your top priority, you might want to explore a high deductible, non-HSA coverage, especially if you don't see the value in contributing to a tax-deductible savings account.

7. An HSA is your greatest bet for keeping health insurance rate hikes to a minimum.

Make no mistake: your HSA insurance policy will see rate rises. There is no rational reason to believe that an HSA eligible policy would be immune to rate hikes required by an insurer to keep paying claims and staying in business because it is still a health insurance policy at heart. 

However, as compared to standard health insurance policies, the real dollar amount of any future rate hikes can be expected to be significantly smaller (regular PPO and HMO plans). This is because insurers utilize percentages to determine increases, and the same percentage of a lower base premium results in a lower dollar increase. It's not a perfect answer, but for many qualified people, it's the most cost-effective option.