For USA guys on here who are working at corporations and paying for health insurance provided by their employer - what is your take on high deductible HSA-plans (health savings accounts) insurance plans?
I was partial to the concept of the HSA plan because I'm healthy and the HSA lets you contribute to the account balance and have it roll-over to the following years, and not have the balance get wiped out at the end of the year like FSAs (I HATE that about FSAs). Also if you build the HSA balance up, you can invest it and it grows tax free. Once you hit retirement age, the restrictions come off and you can spend it on non-health expenses if you'd like (if I have my facts straight)
The downsides I've noticed are if you switch to a non-HSA plan or leave and become self employed or at a company that doesn't offer HSA plans, most banks will charge maintenance fees unless you have a balance of like $5K or greater. The other obvious issue is the deductibles are higher than plans without an HSA, so if you do need significant care, your balance is going to take a big hit. I had a neck injury in jiu-jitsu this year where I had to go to PT, and it bled the account pretty bad. So there's risk.
At my present novice understanding, it seems like to me if you have the ability to save, and don't need much health care, the best play with an HSA is to plow in tax-free contributions so that you get the balance to above 5K as quick as possible and then invest. Once you get there, it's an interesting tax avoidance vehicle because both the contributions and growth are tax free. You can switch back to a low deductible plans at that point if you prefer, leave your job, whatever. But up to 5K, it's a somewhat risky strategy, because if you switch to a different type of plan, you will get nailed by account maintenance fees. And it's certainly possible the banks could raise their threshold to waive fees.
So I'm weighing out the pros and cons, I'm by no means an expert and feel free to fact-check anything I've said. Appreciate any insight/experience you have.
I was partial to the concept of the HSA plan because I'm healthy and the HSA lets you contribute to the account balance and have it roll-over to the following years, and not have the balance get wiped out at the end of the year like FSAs (I HATE that about FSAs). Also if you build the HSA balance up, you can invest it and it grows tax free. Once you hit retirement age, the restrictions come off and you can spend it on non-health expenses if you'd like (if I have my facts straight)
The downsides I've noticed are if you switch to a non-HSA plan or leave and become self employed or at a company that doesn't offer HSA plans, most banks will charge maintenance fees unless you have a balance of like $5K or greater. The other obvious issue is the deductibles are higher than plans without an HSA, so if you do need significant care, your balance is going to take a big hit. I had a neck injury in jiu-jitsu this year where I had to go to PT, and it bled the account pretty bad. So there's risk.
At my present novice understanding, it seems like to me if you have the ability to save, and don't need much health care, the best play with an HSA is to plow in tax-free contributions so that you get the balance to above 5K as quick as possible and then invest. Once you get there, it's an interesting tax avoidance vehicle because both the contributions and growth are tax free. You can switch back to a low deductible plans at that point if you prefer, leave your job, whatever. But up to 5K, it's a somewhat risky strategy, because if you switch to a different type of plan, you will get nailed by account maintenance fees. And it's certainly possible the banks could raise their threshold to waive fees.
So I'm weighing out the pros and cons, I'm by no means an expert and feel free to fact-check anything I've said. Appreciate any insight/experience you have.