Consumers saving less in HSAs
April 05, 2015
Kaiser Health News reported on a study showing that consumers now put less into their Health Savings Account (HSA). While the reasons are unclear, the article relayed that HSAs have been around for a while and as a result, people may have built up sufficient balances in their accounts.
If people do not use the funds before they retire, they can withdraw the funds after retirement (similar to a IRA). If people primarily intend to use HSAs as a way of saving on taxes for medical expenses, then it does make sense that some people will be contributing less (for example, once they have enough to cover a year or so of their deductible). One of the benefits of HSAs has been that the deposited money does not expire like a Flexible Savings Account (FSA). So, if consumers generally don't use their insurance plan, pairing a high-deductible insurance plan (which presumably comes with a lower insurance) with contributions to a HSA allows consumers to pocket the savings in their premiums. Even if people end up paying their entire deductible every few years (somewhat related to last week's post), they can still end up saving over the years using a HSA.