Rising healthcare costs, especially during the COVID-19 pandemic, have affected millions of families in India. Although health insurance plans provide some respite, patients still end up spending a lot on pre- and post-hospitalization expenses. A health savings account (HSA) is a special financial instrument that can solve this problem. This is a new concept in the country and only a few institutions offer HSAs.
What is a health savings account?
An HSA is a one-time savings account that can be used to pay for medical expenses, including those not covered by a basic health insurance plan. It acts like a normal savings account where people can deposit money and use it for health-related expenses.
This special savings account usually offers better interest rates than the regular savings account. An HSA can also be combined with a health insurance plan. Customers can withdraw money from their HSA at any time for health-related expenses. A health savings account can also offer tax deductions and tax-free interest.
Which banks offer HSA in India?
Currently, IDFC FIRST Bank offers a Health FIRST Savings Account which offers 5% interest and an option of Rs 10 lakh health insurance cover with premiums starting at Rs 3,750 per annum without any prior medical examination.
The account covers all pre-hospitalization costs for 30 days and post-hospitalization costs for 60 days as well as day care. With an IDFC FIRST Bank Health FIRST Savings Account, customers also benefit from a VISA Signature Debit Card which offers additional payment offers.
A minimum balance of Rs 25,000 must be maintained in the account. The HSA can be opened through an online application as well as a physical application. Customers will need to produce required documents such as PAN card, proof of ID/address, photograph, etc.
FEDO, a Bengaluru-based startup, also provides early access to the HSA account plan. OFVE provides recommendations on a combination of health care financing options, including insurance products and investment options. There is no minimum amount, but the amount will be based on certain parameters like the individual’s health status, FEDO score, CIBIL score, etc.
OFVE will also provide a chip credit card with the HSA. The entire HSA application process with OFVE is digital and accessible through a mobile app, through their website and internet banking.
Anyone eligible to open a bank account with a financial institution can open a health savings account with the FEDO. For the IDFC FIRST Bank HSA, a person must be an Indian citizen and be between the ages of 21 and 55 at the time of application.
(Edited by : Shoma Bhattacharjee)
First post: STI