As HSA-qualified health plans increase in popularity and availability, employees who select them are frequently faced with decisions about how to manage their new HSA. First, employees have to understand some of the basics; account balances carry over every year, funds can be used for a spouse or tax dependent, the fact that there are annual contribution limits, etc. These details inevitably lead employees to ask the critical question, “how much should I contribute to my HSA?
HSAs have experienced significant growth in recent years. Devenir, a national research company, published their 2016 survey results in February 2017 and found that HSAs assets grew by 22 percent in 2016. They estimate that total HSA assets will continue to increase for the foreseeable future.
Despite all of this growth, there are some persistent myths about HSAs that may cause some people to hesitate in opening an account and miss out on the advantages that HSAs provide. The following are facts that answer fictions related to HSAs:
In 2003, health savings accounts (HSAs) were established as a way for people to save tax-free money for qualified medical expenses. Since that time, millions of people have created accounts and benefit from the tax savings that comes with an HSA.
HSAs have inherent advantages that other medical savings accounts don’t, but there are a few details about HSAs that make some people nervous to open an account. However, when you look closer, you’ll find that the “worst” things about HSAs can actually be advantageous to accountholders. Here are the three “worst” things about HSAs:
Many companies are in the middle of their open enrollment period, and health savings accounts (HSAs) are offered by more companies than ever before. But, because not everyone can be experts on HSAs, it may be difficult to answer questions that employees might have. Your employees need to know the best way to use an HSA to maximize their benefits and ensure they are spending HSA funds on qualified medical expenses. You may be wondering how an HSA can benefit your business. Fortunately, there are some useful resources for employers and employees who are looking to educate themselves about HSAs. Check out our top 3 reccomendations:
Since HSAs are already tax-advantaged accounts, fees are the largest obstacle to the potential growth of the HSA amounts you are saving for the future. There are a number of different HSA providers in the marketplace and, as a consumer, you need to know where fees may be hiding. Over the long term, it can result in significant losses and missed earnings.
Due to its tax advantages, the IRS has certain rules when it comes to the administration of HSAs. This places HSA providers in a unique position in the marketplace. For the most part, HSA providers want to provide a service to help people, but at the end of the day, they are businesses. And like all businesses, they are established, first and foremost, to make a profit.