Is Midwifery Care Eligible for HSA Coverage?

January 20, 2022

Health Savings Account

A Health Savings Account is one of my favorite tools for families, midwives, and businesses. Every year the limit for contribution increases and varies for single and married individuals (as of 2020, $3550 for single and $7100 for family). This money is tax-free in and out for medical expenses for the rest of your life.

It isn’t a use-it-or-lose-it plan (Flexible Spending Accounts). It isn’t a 401(k) where you are taxed as income and pay an early removal penalty before 59-1/2 years old. There only condition is your health insurance plan needs to be a high-deductible plan. That means, for a single person the yearly deductible needs to be a minimum $1400, and family $2800. If you have a high deductible qualified plan, start this account today!

Midwifery Services

Midwifery services are covered by your health savings account as long as the state has midwifery licensure. If there is ever an audit of your health savings account use, you will have to explain why a non-licensed health care provider was paid from this account. It needs to be for medical care by a provider that is licensed to practice in that state for services to be rendered.

It is the only tool I have found that is tax-free in and out for any medical care or supply you desire. This is a great tool for families struggling to find ways to pay for midwives. It is a great way to keep your income level down and avoid paying taxes. It is another way to invest and plan for long-term wealth (you can use your HSA funds to invest versus using a savings account to leave them in to grow at 0% interest). The possibilities are limitless. I have been introduced to an amazing resource that breaks down a health-qualified expense under HSA.

List of all HSA Qualified Expenses

https://www.hsalist.org

What is going to be your most expensive expense in retirement? MEDICAL BILLS!!! Why not put some of your money into a retirement account like a 401(k) pre-taxed account, some of your money into a ROTH post-taxed account that grows forever with no more taxes, and a health savings account that builds your retirement medical fund? Many young families will tell me we rarely see a doctor and this account isn’t needed for us. I say this is the most important time to have this account. It can be grown over a long period of time and invested properly to give you hundreds of thousands of dollars in tax-free funds for medical bills in the future. Who wouldn’t want an account like that?