Health Savings Accounts

Benefits and Advantages

• HSA accounts encourage savings for future medical expenses
  - Non-covered services under future coverage
  - When employer-sponsored coverage is lost during periods of unemployment
   
• Other coverage
  - Medical expenses after retirement (before Medicare eligibility)
  - Insurance coverage after Medicare elgibility (except Medigap)
  - Out-of-pocket expenses for Medicare
  - Long-term care expenses
   
• COBRA continuation coverage
   
• Accounts are owned by the individual (not an employer). The individual decides:
  - How much to contribute
  - How much to use for medical expenses
  - Which medical expenses to pay from the account
  - Whether to pay for medical expenses from the account or save the account for future use
  - Which company will hold the account
  - What type of investments to grow account
   
• Accounts are completely portable, regardless of:
  - Whether the individual is employed or not
  - Which employer the individual works for
  - Which state an individual moves to
  - Age or marital status changes
  - Future medical coverage
   
• No "use it or lose it rules" like Flexible Spending Arrangements (FSAs)
  - Unspent balances in accounts remain in the account until spent on medical care
  - Encourages account holders to spend their funds more wisely on their medical care
  - Encourages account holders to shop around for the best value for the health care dollars
   
• HDHP premiums should be cheaper than health insurance with traditional deductibles
   
• Favorable tax treatment
  - Contributions
  - Disbursements
  - Investment earnings