Do I Qualify for A Health Savings Account?

Are you eligible for a Health Savings Account? If so, you'll want to understand how to maximize your HSA!

Learn the tips & strategies to get the most out of life with your money.

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[ericgold]

James is spot on in pointing this out. It is a smart way to maximize the value of an HSA because the HSA dollar is worth more than the brokerage dollar in cases where the future HSA dollars pay for eligible medical expenses and the brokerage dollar incurs tax drag and eventual capital gains tax upon withdrawal. I would only mention one detail that was not talked about: the $30k that James pulls out in the future are inflation depreciated dollars. The approach is valuable to be sure, but the emergency fund is in deflated money

[randolphh]

All good points on HSA’s which are a great investment option. Start as soon as you can, especially when healthy when you won’t care about the higher deductible.
Also note that usually a “high deductible health plan” (HDHP)has lower premiums, so not only are you able to contribute, but you also pay much lower premiums if your employer doesn’t pay the full premium for you and your family.
The only time to be cautious about a HDHP is if you expect a lot of medical bills, as the deductible can be way higher in some situations. You can move back and forth from year to year, so if you have some predictable health events you can run the numbers.
The last important point is that you can use the HSA funds for many things not covered by regular medical insurance, including many OTC products, dental, vision, LTC, and Medicare premiums in the future! But, you will need records for all. There is a list on the IRS website of deductible medical expenses

[RE-bwof]

I'm so confused about the qualifications for having an HSA. If my 2023 healthcare plan (individual coverage) had a minimum deductible of $1700 and an out of pocket maximum of $4000, would it have been HSA-eligible?

IRS publication 969 states that your HDHP qualifies if your minimum annual deductible is $1500 and a maximum annual deductible and other out of pocket is $7500. Does my plan above fall into these limits or does my maximum out of pocket need to reach $7500?

[michaelswami]

If you break your arm, five years in a row, I recommend you lay off the bottle