Why Are HSAs So Under Utilized?

hsaThe trade association, America’s Health Insurance Plans, reports that of the 22 million Americans who own Health Savings Accounts, more than half have not contributed in over a year. More discouraging is that while about a third say they can’t afford to contribute, even more say they haven’t even considered it. This would cause one to believe that the majority of people who have this tool at their disposal simply do not understand its many benefits.

Unlike Section 125 accounts, unspent HSA balances carry over from year to year. Offering a triple tax advantage, qualifying contributions are made pre-tax, earnings accumulate tax-free and withdrawals are made tax-free as long as funds are used to cover qualified medical expenses. The ability to carry unspent balances forward makes an HSA a great retirement planning tool since funds can be used to pay for more than healthcare once the member reaches retirement age.

At a time when financial wellness offerings are in demand, it would seem that Health Savings Accounts are a gift that keeps on giving. Rather than positioning your HDHP/HSA option in the back of your enrollment kit, promote it as a valuable benefit that can help cover healthcare costs to and through retirement.


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