What are your experiences with HSAs (Health Savings Accounts)?

Question

An individual can open an HSA if he/she has a high deductible on his/her health insurance premium. The scheme offers some tax advantages--

1) contributions are tax deductible going in;

2) appreciation is tax free;

3) withdrawls are tax free for qualifying expenses.

But are these savings accounts as good as they sound on paper?

Answer 1

I've had one for years and just love it. It covers my co payments at doctors, my deductible, prescription out of pocket and co payments, dental expenses, eye glasses, exams and contacts and even over the counter qualifying items.  I put in the maximum every year and use every dime of it.  But, you have to calculate how much you spent in the last year out of pocket then estimate how much you might need in the next year to contribute so you don't lose it.  Now ours lets you rollover any remaining money for the first 3 months of the following year, but I never have anything left to roll over at the end of the year.

Answer 2

HSA's are usually use it or lose it. if you don't spend the money within the plan period, the plan gets to keep it. make absolutely sure that the amount you are contributing will be spent.

my plan makes me save reciepts just in case they decide to contest an expense. no time limit on when they might ask, so i now have a big stack of reciepts.

if you know that you will spend the money and you can deal with plan requirements, do it. might as well do it tax free.

Answer 3

They are not all use it or loose it.  Some let you roll you money over from year to year.  You will still get reduce rates for medical services since you have insurance but you will have to pay out of pocket and get reimbersed from the HSA.  Some require reciepts, some don't.  After 65 you can ussually use the money in your HSA for whatever you want with no penalty.  They are a good option if you don't go to the docotr very much sincce the premiums are way lower.  But if you have small children I wouldn't recommend it.  When I had my HDHP/HSA I just paid my medical expenses out of pocket and left all of my $ in my HSA sort of like and additional retirement savings but I had very little medical expense.

Answer 4

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