HSA - how much ?

[livingalmostlarge]

I keep seeing people ask questions about HSA, I don't have one and never had. We've always had the vanilla PPO insurance by employers. So no option to fund an HSA.

How much did people save into HSA? I totally get saving it for retirement and drawing on it, but has anyone else run into not having one?

I don't know if we will ever have an HSA since it appears to be not common for us. I'd love to have one but I wonder if it would also be more expensive than the PPO we currently are provided by employer. I know HDHP are cheaper but we're being given our plan.

 

[foxfirev5]

I keep seeing people ask questions about HSA, I don't have one and never had. We've always had the vanilla PPO insurance by employers. So no option to fund an HSA.

How much did people save into HSA? I totally get saving it for retirement and drawing on it, but has anyone else run into not having one?

I don't know if we will ever have an HSA since it appears to be not common for us. I'd love to have one but I wonder if it would also be more expensive than the PPO we currently are provided by employer. I know HDHP are cheaper but we're being given our plan.

If you are given your PPO plan and do not have a HDHP available at a credit/discount it's a moot point.

 

[Rainbowdash]

I have a HSA account for many years, initially I did not know that my health insurance needs to be high deductible, I contributed to the max for a few years then I realized I have to have a high deductible HI. So I changed my health insurance to the one that qualifies, I expected IRS to hit me with penalty and interest since I deducted HSA all those years, it never happened.

 

[Biker_on_FIRE]

If it is not available to you, I wouldn't sweat it. And even if an HSA plan was available to you but doesn't make sense due to the high deductible, then you shouldn't choose it just for the tax advantage.


We do contribute the maximum to the HSA ($7300 in 2022) and use it as a long term investing plan (we don't pay medical expenses out of it) to invest in low cost index mutual funds and plan to use it to pay for medical expenses, probably when we are in our 70s.

 

[RunningBum]

I have a HSA account for many years, initially I did not know that my health insurance needs to be high deductible, I contributed to the max for a few years then I realized I have to have a high deductible HI. So I changed my health insurance to the one that qualifies, I expected IRS to hit me with penalty and interest since I deducted HSA all those years, it never happened.

The IRS can't catch everything. If you want to make it right, withdraw the amount + gains without receipts and pay taxes on the withdrawal. That makes it act like a tIRA and you gained no advantage. Or don't contribute for an equal number of years while you have an HDHP plan to at least somewhat even it out.

 

[big-papa]

I keep seeing people ask questions about HSA, I don't have one and never had. We've always had the vanilla PPO insurance by employers. So no option to fund an HSA.

How much did people save into HSA? I totally get saving it for retirement and drawing on it, but has anyone else run into not having one?

I don't know if we will ever have an HSA since it appears to be not common for us. I'd love to have one but I wonder if it would also be more expensive than the PPO we currently are provided by employer. I know HDHP are cheaper but we're being given our plan.

I've been in the post-university workforce for a little over 38 years.
For the vast majority of the time I had a standard PPO through my employers.

I had one employer for about 3 years with an HRA, which they designed to mostly offset the deductible in their plan but it also could be used for prescription reimbursements even before the deductible was met.

Only in the last 5 years have I been at an employer with an HSA and we max it out. If I had used the HSA to pay for ongoing medical expenses, cash-flow wise, it would have been almost on-par with my previous employer's PPO Plan + HRA. But we don't. This will be used in the future for medical expenses, either prior ones being incurred now (we save all receipts) or more likely any ongoing ones we have during retirement. Because I won't have had an HSA for all that long, it will never be a huge part of our portfolio, but we do keep it fully invested at 100% stock as we would a Roth IRA.

Cheers,
Big-Papa

 

[old medic]

I just switched to a $7000 out of pocket plan with a HSA after retiring, Hoping I can add $3600 for last year, and plan on doing some PT work to add the max $3650 each year I can.. I'm sure I'll find a use for it at some point in time.

 

[mrfeh]

I didn't have a HDHP available through work until a few years ago.

I only wish I'd been able to fund an HSA for decades.

 

[EastWest Gal]

The last few years of working, the company offered an HSA with a HDHP. I put money into the HSA those years, but never used it. I've kept some receipts so I can tap into if I need to, but plan to use it for Medicare premiums. Halfway through this, the company changed administrators but never rolled the money from one to the other. So I had two HSA accounts in places that did not allow investments. Just charged fees.

I finally rolled them into a Fidelity account. This year I chose an ACA plan that was not HSA compatible since there was no ACA cliff, and it was a better plan. I might choose an HSA compatible plan the next two years, which allows me to put money in should I get close to the ACA cliff. Could save $15K that way.

I have about $20K in the HSA account. Some of it is invested. I should invest all of it, but haven't got around to it. With a 7 figure nest egg, I don't pay much attention to that $20K.

 

[Sue J]

During our years using ACA insurance 2014-2020 there were 4 years when we chose HDHP plans with HSA. I always made the full contributions including the catch up for over age 55.

I never used it to pay ongoing medical expenses. Instead I paid out of pocket and then evaluated if I needed to withdraw. Early on I did a lump sum withdrawl to cover the costs of a hip replacement while on a high deductible plan.

The rest of the contributions were invested in Vanguard funds through the HSA administrator. Last year we moved our HSAs to Fidelity for the NO FEES and very nice fund options.

I keep a spreadsheet of all the medical expenses and HSA reimbursable premiums (Part B, Part D but not Medigap). I'm going to keep it invested as long as I can. It's done nicely.

I checked the HSA spreadsheet. We contributed $33,100. I've withdrawn $15,856, which leaves $17,244. It's now worth $24,109. In addition to that tax free growth we also had the tax reduction in the years that we could contribute. And reducing taxable income while using ACA resulted in larger subsidies.

 

[disneysteve]

I only had one briefly, for about 2 years. Until then, every year when we shopped plans, it never made sense to pick the HDHP/HSA because it was considerably more expensive than the other options. Finally, one year the numbers changed and made it the better choice.


I have been exploring ACA options and the HSA plan might be the best choice but we're not at that point yet so I'll see how things look when we're actually there.

 

[pacergal]

Never had the option, only FSA which was yearly and a "use it or lose it", so you had to be careful figuring out how much to take out pretax each year. One year I lost $5, forgot I still had some money there! I usually did a random pharmacy run in December to restock OTC meds and bandaids, if for some reason we had not used it all yet.
We managed though and it was a nice feature.