One Goal Complete In Time To Start On The Next (Opinions on HSA's?)

[myrdale]

I finished maxing my Roth IRA for 2025 over the week end. This was done just in time to start saving towards my new HSA at work.

Do any of you have experience with these? Have you liked it? Is it more hassle than it is worth?

For 2025 the maximum amount you can contribute is $4,300. My understanding is we have to maintain some $2,000 in it then we can invest any amount beyond that. I set my initial contribution at $360, but since we are already in May, I'll have to up that if I want to max it out.

My medical bills are typically small. Two doctor visits, blood pressure medicine, a couple of eye doctor visits. I'm assuming I'll pay these all out of pocket, and hold onto the receipts for the long term. Is that how you do it? Or do you do something different?

[disneysteve]

We only had access to an HSA for one year unfortunately. It's a great backup retirement plan if you don't need the funds. And if you do need the funds, you get to pay medical expenses with pre-tax dollars so you can't lose either way. If I had one, I'd max it out each year for sure. We still have about 3K in ours from the year we did have it.

[ua_guy]

I've had HSAs in the past. My employer would give us a set amount (typically $1k?) towards it each year, and I'd keep contributing until I hit my OOP max amounts. Anything beyond whatever threshold they specified could be invested. The money invests like anything else. If you switch plans to something that isn't an HSA, you can still keep the money, and you can use it on qualified medical expenses without paying a penalty outside your HSA coverage. But you can't contribute more money unless you're actively enrolled. You can also take it as a disbursement and cash out, but you pay taxes (and penalties?).

HSA's make sense to a point, they are a gamble to some extent. If your cost between an HSA and a PPO/EPO with better coverage is minimal, it can pay off to stick with a non-HSA plan, depending on your needs.

Case in point, we were very glad to be on a good PPO plan the year my husband was diagnosed with cancer. It was actually HSA savings that went to paying our OOP max for the year even though it was a PPO plan. The PPO covered way more.

[Jluke]

Maybe next year start contributing to the HSA in January.

are you starting to save for next year’s Roth?

[disneysteve]

HSA's make sense to a point, they are a gamble to some extent. If your cost between an HSA and a PPO/EPO with better coverage is minimal, it can pay off to stick with a non-HSA plan

Definitely. The reason why we only had an HSA plan for one year is because every other year when we shopped plans at work the HSA plan was more costly than the non-HSA plans so it made no sense.

[QuarterMillionMan]

HDHP prevents me from participating but I wish that I could participate.

[kork13]

HDHP prevents me from participating but I wish that I could participate.

That's curious, I thought that one of the keystone features of HDHP insurance plans are that they give you access to an HSA for use in covering your higher deductible.

My father had (has?) an HSA, and he's very much a fan. He generally has very low medical costs (though that's mostly because he generally avoids doctors when possible)... He's planning to go the thing where you save medical bills, pay them out of pocket, and let the HSA grow like another Roth IRA, then eventually claim the expenses for HSA withdrawals later on. I've never had an HSA, so I may be misunderstanding how that works .... But we I said, my dad loves having his.

[ua_guy]

That's correct. Having an HDHP/High Deductible Health Plan is a requirement in order to have an HSA/Health Savings Account (tax advantaged).

https://www.cms.gov/marketplace/outreach-and-education/health-savings-account.pdf