- They are a great way to pay for both long-term and short-term cost of health care.
- Both employees and employers may “decouple” their HSA out of their plan for health insurance.
- Any financial advisor may help you to select HSA provider which meets your needs.
For most of us who are working, there are two biggest savings to be made that is required for – retirement and health care.
Though most employers in the USA cover both these within the benefits package, a few people often view them as separate expenditure till they reach their retirement age and see how the health care cost will affect their standard of living during their retirement.
Due to the emergence of various HSA providers now things are changing. Health savings accounts known as HSA is a unique strategy for investment which may help pay for all your health-care related part of the retirement spending.
Following 3 distinct features can expand HSAs from those accounts which can fund your short-term medical expenses and make it into long-term investment vehicle:
1. Triple-tax-free benefits
All contributions can be made pre-tax, while your earnings and also the distribution of all those earnings can be tax-free for any qualified expenses for health care now and also in future.
2. Provision of stowing and growing
All HSAs may be rolled over again and again from every year to year in case the savings are not spent, unlike the “use-it-or-lose-it” type of flexible savings accounts i.e. FSAs.
3. Individual account control
All HSAs are self-directed and individual accounts that will mean that you can move all of them and also invest them with some other HSA provider too and not just the one who handles your present health insurance.
Therefore, how can you make most of the investment opportunity provided by HAS?
In case, you happen to be an employee in any HSA-eligible or high-deductible plan for health insurance, you will not only save but also invest all your HSA assets along with the contributions of employer as well as employee.
You are free to choose any provider, not just the one that your employer will offer to you.
This will provide you much greater investment opportunity, particularly if your employer offers only cash-based or any low-return investments obtained from their present provider of HSA.
If you are an employer, then you may not even know that you may also expand your range of all available investments just by de-coupling with your own HSA provider from high-deductible kind of health plan provider, that also can be your health insurer who offers a much lesser robust investment menu.
Following are a few things that you may look for while choosing an HSA provider. You may take help from any financial professional.
- Investment threshold
- Investment menu
- Self-directed brokerage
- Financial strength
- Tiered interest rate
- Investment sweep capability
- HAS on demand