Health Savings Accounts are Misunderstood


As Health Savings Accounts (HSA) become more available to employees, it’s time to make sure you understand the benefits of these accounts.

More than 40% of American workers are enrolled in a high-deductible health plan which gives employees access to an HSA.

The Health Savings Accounts has these main attributes:

  • Pre-tax contributions (up to the IRS limits)
  • The ability to invest your contributions
  • Potential investment gains
  • Balances are carried forward year after year and funds never expire
  • Tax-free withdrawals for qualified medical expenses

Check out this Barron’s article to learn more about the “triple tax advantage” account.

HSAs and Medicare

Please also note there are some limitations to these accounts. For example, if you have signed up for Medicare part A or B, you can no longer contribute to your HSA account even if you are still covered by a High Deductible health plan.

You also can not have a balance in your health FSA (flex spending account) and an HSA at the same time. Before you begin contributing to your HSA, you either need to fully spend down your FSA, or have the ability to convert it to a limited purpose FSA if your employer allows.

Knowing these types of limitations is why we are here to help!


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