In a previous post we revealed some fees that may be lurking in an HSA. In this post we’ll go a step beyond and explore what fees reveal about your HSA provider and their motivations.

Michael Kitces, director of financial planning at Pinnacle Advisory Group Inc. stated in a recent Wall Street Journal article, that HSAs are, “..the most tax-preferred account available. Using one to save for retirement medical expenses is a better strategy than using retirement accounts.”

Note: This is the second of a 3-part series of blog posts. A previous blog post discussed contributing to an HSA, and a subsequent post will discuss distributing (or spending) HSA funds.

Since 2003, when they were created, millions of Americans have taken advantage of health savings accounts (HSAs) to save money for healthcare expenses and retirement.

One major advantage of an HSA is that accountholders can grow their HSA funds tax-free.¹ And because HSA funds roll over every year, those funds can grow all the way into retirement, saving a lot of money in taxes over time.

Below are three basic ways HSA owners can grow their funds:

“In this world nothing can said to be certain, except death and taxes.” — Benjamin Franklin

With the passage of new tax laws in December 2017, the United States Congress made changes for deductions and corporate tax rates, but they left the tax benefits that come from health savings accounts (HSAs) alone. More recently, the annual family contribution for 2018 was reduced (read more here).

HSAs are one of the most tax-advantaged programs allowed by the IRS. Since their creation in 2003, millions of people have taken advantage of the tax savings, healthcare and retirement benefits that come from having an HSA.

When it comes to your employees, HSAs offer three ways to save on taxes.¹ As an employer, you can also take advantage of tax savings. Here’s how:

UPDATE: On April 26, 2018, the IRS reversed their guidance and restored the maximum annual contribution limit for a family HSA to $6,900 for taxpayers with qualifying coverage. Accountholders wishing to make the maximum annual contribution, and who have adjusted their current contributions based on the lower limit, may now adjust their contributions as needed.

On March 5, 2018 the IRS announced that the maximum annual HSA contribution limit for an individual with family coverage in 2018 has been lowered from $6,900 to $6,850. The maximum annual HSA contribution limit for an individual with self-only coverage remains at $3,450. There is also a $1,000 catch-up contribution available to individuals who will be at least 55 years old during 2018.

There is a possibility that this change could be reversed and/or amended. HealthEquity will be following future developments and updating this blog post with more information as it becomes available.

 Note: A previous blog post discussed answers to the top 10 HSA questions. We will continue to bring you answers to top HSA questions.

This post is part of our ongoing series of articles related to the top questions about HSAs. The following questions are popular questions about using an HSA to save.