Categories: Benefits Management, Policy & Regulation,
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Are You Maximizing Your HSA Benefits?

People don’t think of health savings accounts (HSA) as a long-term benefits option and they overlook its’ value as a savings tool.

A study from UMB Healthcare Services found that less than one percent of participants maxed out their allowable contributions. People are accustomed to using HSAs in the same manner they use their flexible spending accounts (FSAs)—which are bound by use-it-or-lose-it rules—that they overlook the long-term nature of health savings accounts.

The 2015 maximum allowable contribution for individuals is $3,350 and $6,650 for families. (Those over 55 can add an additional $1,000 annually.) When you consider that these amounts are deductible from gross income, it’s easy to see people are missing out on a major opportunity by not taking full advantage of these accounts.

The average annual cost of out-of-pocket healthcare costs for a healthy couple retiring at the age of 65 in 2014 dollars is estimated at more than $220,000. That’s after Medicare, and does not include long-term care costs. Fortunately, HSAs offer multiple investment options, including money market funds, self-directed accounts for mutual funds or individual stocks and FDIC-insured accounts for cash needs.

If employees are better educated about the advantages of HSAs, they’ll be better prepared for retirement.

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