Make Sure You Understand the Weaknesses of an HSA

Health Savings Accounts (HSA) are incredible financial tools, but they do have some challenges that keep them from being the perfect account. You'll learn about the important weaknesses of the HSA account.

If you are close to Medicare and have an HSA, you need to watch this video:

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⏰ TIME CODES ⏰
0:00 HSAs are not perfect
0:15 Limited on who can have one
1:24 Watch out for fees
2:07 Penalties
3:30 Contribution limits
5:58 Don't plan nice with Medicare
7:05 Non-Spouse beneficiaries
7:27 Difference between FSA and HRA

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#medicare #theretirementnerds #hsa #retirementnerds #finance

Federal Disclaimer:

[Theretirementnerds]

Quick clarification on the catch up contributions!

Each spouse can make catch up contributions as long as each spouse has their own HSA.

If only one spouse has an HSA, both spouses cannot put the $1, 000 ($2, 000 total) into the 1 HSA.

The spouse without an HSA can open his or her own, separate HSA and then put their $1, 000 contribution in their account.

[pablo]

Such a clear and concise HSA summary!!

[leonardpereira]

Erik: I agree after review of HSA so thoroughly explained by you, there is an alternative.

I can email you if you'd like the answer. The vehicle I'm referencing is non-taxable and makes it tax-free for the beneficiary. It also does NOT have limits of contribution.

[jgallone]

If you start a HDHP mid-year, I understand that your contribution limit is pro-rated based on when you start the plan. However, if you know that you will maintain the HDHP in the following year, you can contribute the maximum amount rather than the pro-rated amount. Is that correct, and do you discuss this in another video?

[randolphh]

I like these, but deductibles are often quite high. We learned to move our monies to another HSA provider, that offered better investments. Don’t do these if you are not healthy.

You are not correct about the catch up. If both spouses are insured and the correct age, they both CAN contribute BUT the spouse’s catch up must go into their own separate HSA account.

We were fortunate over the years to each have the primary account at different times, so it was easy, but it is still worth it to create a second HSA even if only for a couple thousand $.
Because we both had family accounts we are each able to use each other’s accounts for reimbursements.

[barthill]

Thanks for the explanation. Are you sure there is a maximum employer contribution of 2100? My CPA consultant told me that employer can contribute directly to the HSA account as long as it is below the annual individual limit. Are you sure there is a lower limit for employer contribution? I couldn't find much info on that.

[Ittsy-Bitsy]

Management fees are part of life. No avoiding them possible.

[revolution]

You missed one on the limit contributions for you+spouse, you+child... how about you+domestic partnership $$$

[oliverallen]

I’m 40, and never used a hospital. HSA seems a lot worse than just saving & investing, especially over a long period.