Why Health Savings Accounts Are Misunderstood and Underused | WSJ Your Money Briefing

The amount Americans can contribute to a health savings account will rise to the largest-ever increase on record next year. WSJ personal-finance reporter Ashlea Ebeling joins host J.R. Whalen to discuss what you should know about HSAs.

0:00 Health savings account, explained
1:34 Why the IRS is increasing HSA contribution limits
2:20 Medical expenses paid by an HSA
2:53 HSA vs. 401K
4:40 HSA vs. FSA

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#HSA #HealthCare #WSJ

[tomlee]

I fell in this boat where I didn't know that HSA can be invested so that accounts can grow. My company deposits a contribution in the account but I could have contributed money myself (or i thought i was). It's really important that people who work in companies check their enrollment plans and verify EVERY YEAR, they don't education enough people on this and i found out through the internet.

[liketheduck]

VTSAX for your HSA if you’re young. Don’t touch it, keep all your healthcare receipts to withdrawal the money any time after the expense. But it’s best to leave the money in to grow tax free and keep the receipts for a rainy day expense.

[Aaron-tyvz]

High deductible plan is pretty much what you need to weigh. If you expect to use more than a few visits there are some plan choice considerations. Although nobody plans to get injured or sick.

[kellymohan]

Thanks for the information. It’s almost too good to be true.

[luvyarora]

HSA is dope. A good tool to your overall financial success

[SuperGreatSphinx]

A health savings account (HSA) is a tax-advantaged medical savings account available to taxpayers in the United States who are enrolled in a high-deductible health plan (HDHP). The funds contributed to an account are not subject to federal income tax at the time of deposit. Unlike a flexible spending account (FSA), HSA funds roll over and accumulate year to year if they are not spent. HSAs are owned by the individual, which differentiates them from company-owned Health Reimbursement Arrangements (HRA) that are an alternate tax-deductible source of funds paired with either high-deductible health plans or standard health plans.

HSA funds may be used to pay for qualified medical expenses at any time without federal tax liability or penalty. Beginning in early 2011, over-the-counter medications could not be paid with an HSA without a doctor's prescription, although that requirement was lifted as of January 1, 2020. Withdrawals for non-medical expenses are treated very similarly to those in an individual retirement account (IRA) in that they may provide tax advantages if taken after retirement age, and they incur penalties if taken earlier. The accounts are a component of consumer-driven health care.

Proponents of HSAs believe that they are an important reform that will help reduce the growth of health care costs and increase the efficiency of the health care system. According to proponents, HSAs encourage saving for future health care expenses, allow the patient to receive needed care without a gatekeeper to determine what benefits are allowed, and make consumers more responsible for their own health care choices through the required high-deductible health plan. Opponents observe that the structure of HSAs complicates the decision of whether to obtain medical treatment, by setting it against tax liability and retirement-saving goals. There is also debate about consumer satisfaction with these plans.

[niameanspurpose]

i still dont understand why the limits are still tied to the household type.. HoH, single... married... im single... its crazy

[sov]

Alway max my HSA, each year. Invest in funds and watch it grow. HDHP not the best, but i will switch when i have around 50k to a better plan

[TakenTook]

Not all employer groups are able to use the pretax contributions to an HSA. Make sure you find out which one applies to you.

[BFleming]

I prefer HDHPs. When I use healthcare, I pay for it. When I don’t use healthcare, I don’t want to be paying for it with monthly premiums.

But every employer is different. Maybe your company has awful HDHP options with some low quality provider and high premiums on top of high deductible. Again, my experience has been good HDHP choices that I found to be a better deal than PPOs.

By having the HSA, I don’t mind paying $5K for medical in years when I use it. The only “scary” bit is when you are building your HSA balance up.

[chapelknight]

Getting near $7K in my HSA. If only you could use it for vet bills.

[drmode]

But the biggest caveat is you need an HDHP. As a result, I don’t use.

[bjdeng]

Thanks for the info. In the video, it said that a couple both over 55 years old, they can put a max of $10300 in 2024 (=$8300+$1000*2 for catch up). Can they open one HSA account and put $10300 in the account, instead of opening two HSA accounts to get the benefit of $1000 pp catch up? Typically, a couple would sign up one HDHP.

[Acteaon]

2:29 aren’t we ALREADY over paying with or with out it‽!?‽

[J.futch]

I tend to disagree. HSA plans have the same monthly premium for a plan with significant out of pocket cost (typically pays nothing until you meet a $7k deductible). Best case scenario you break even with the tax benefit.

[terrelmoss]

What are good HSA brokers besides Fidelity?

[rogerstone]

These are fantastic takes, I was really hopeful of my investments this year, but all my plans have been disoriented, I've been studying the market crashes and I realized some investors made millions from the recent recession and I was wondering if such success rate could be achieved in this present market. I'm open to ideas about investing for retirement.

[ChiakiShirakawa]

All you want is Money?
Health?
Whose?
🤑🤮

[CharlotteIsabellaX]

What are the best strategies to protect my portfolio? I've heard that a downturn will devastate the financial market, so I'm concerned about my $200k stock portfolio.

[auro]

why? so you can invest in new new military and surveillance technologies