Suze Orman TwitterSuze Orman FacebookSuze Orman YouTubeSuze Orman LinkedIn
View Blog & News List

Health Insurance: 3 Reasons You Should Pick the HSA Option

October 01, 2015 at 12:00 AM

About half of large employers now offer a high-deductible health insurance plan (HDHP). I know the mere mention of “high deductible” might send your blood pressure skyward, but please listen to me. For many of you, a HDHP may be the smartest health insurance.

There’s no denying that employers like HDHPs as a way to control ever-rising health insurance costs. But that doesn’t make HDHPs bad for you. It’s important to understand that HDHP plans come with a savings account option, called a Health Savings Account (HSA). And it's the HSA part of the plan that is the key to it all.

Here are three reasons you should seriously consider an HDHP with an HSA.

1.   A lower premium.  If you work for an employer that requires you to pay a part of your monthly health insurance premium, the HDHP will typically have a lower premium than other plans. That makes sense because you’re on the hook for a higher deductible.

2.   Employers typically kick in money to your HSA. The HSA is your own personal savings account that can be used to pay for approved medical costs. Everything from co-pays to deductibles (just not premiums.) Many employers make an annual contribution to an employee’s HSA account. If your employer offers this “seed” money, go through this mental exercise: subtract the amount of the seed from the annual deductible for the plan. I bet you will be surprised that your net out of pocket cost for this “high deductible” plan is not so high now.

3.   HSA savings are a tax bonanza. In addition to your employer’s “seed” contribution to your HSA, you can also contribute to your HSA savings account. The money you contribute comes straight from your paycheck, and is pre-tax, so it reduces your taxable income for the year. Any money you don’t use in a given year to cover medical costs continues to grow tax-free. (There is no use-it-or-lose-it issue to worry about, as you have with a Flexible Savings Account.) And the biggest tax break comes in retirement. Any money you withdraw from your HSA to cover an approved medical expense will be 100% tax-free. Yep, your HSA is the equivalent of a Roth IRA for health care. That is a seriously great deal.

I highly recommend you give a HDHP with an HSA serious consideration.


Tag Cloud

Financial Educator20 year level term home loan credit score below 740 yours, mine & oursFinancial AwarenesssidelinedPrime Rate Rise 2015insurance mistakeBankruptcyis it necessarydoctors in networkForeclosurePay Off Debt Before Retirementhome buying seasoncomparison shoppingHigh FICO Score = Better Ratepublic service loan forgiveness programfocus on new truth Vital Documentscredit utilization rateLTCInvest for savings growthFederal Funds Rateno tax on withdrawlspaid vacationhealthy aging Baby Boomersdon't derail retirement savings2015 record year car salesHoliday Seasondental insurance debit carddon't use allowance as bribepay interest while in schoolonly offered while employed low credit scorehealthy gumsresponsible with moneyearn allowanceverify retirement plan with HR or plan sponsorCommencementletter to suzeBeauty15 year mortgagepaying for collegelong-term care mortgage brokermonthly dental insurance premiumnegotiate points with bank or sellercompare provider pricingtaxesclosing costs 2% of loanjanuary billsunder 18 financial giftUrbana-Champaignburn outmaintain standard of livingprotect loved ones teensSelfishmultiple lendersno sneaking in feesFinancial Gift Cliffreduce monthly paymentborrowing plan loan is giftbudgetdo not pay allowance for good behaviorCredit scoreEmployer Matched Contributionprotect your family8 month safety nethigher monthly paymentcut monthly cable billno apologyEasy Life Insurance leave a legacyloan big picture emergency fund savingscost of capitalization calculatorpoint cost offset by savingssecure creditNew american Dream powerfulCommunication Skills Financial Power of Attorneygraduationunexpected expenseadvice for college graduatesWarner Bros Television Groupterm insuranceretain separate credit cardsdebtschedule vacationStudent Loan40% toward financial goalclosing feesfederal student loan deferment High Credit ScorePhyllis Shelton expert long-term careschool Sandy Hook Promisebe true to yourselfstudent loan repayment estimatorstrained relationshiprefinanceage appropriate goalspay down car loanbalance transfer Holiday Shoppingpurely financial standpointcan you afford itFHA loan feesGiftsLTC shoppingYoung Adult tax ID theftbreakdown projected monthly housing costInfluential Celebritycar loancontribute household expenses setup automatic savings withdrawbe good exampleproperty taxmeet monthly Financial Cliffno waiting perioddental savings planlow down payment2016 adjust estimated taxtake actionpay credit debt ASAPbetter termscut monthly cellular bill2016 adjust withholdingno late fee anticipated salarydon't defer interest paymentsraising mortgage rates max employee matchdon't spend lower premiumhigh premiumsget credit cardcollege student3 step financial road mapCombo Insurance Productsis it kind?non conventional route401(k) Contributionsultimate compounding giftitemized deductionprovider of financial supportiffy incomewomen live longerdo you need life insuranceno private loanCredit Card Rate Increaseworkaholicstudent loan debtmortgage interest tax deductiondon't do five year car loanFinancial SystemEric Dodge CD'sAARPbuy home you can affordHDHP School of Social Workrequire chore in exchange for allowancesuitablehome buying mistakesreal estate mistakesETF'sdon't charge a pennylousy investmentco-sign How To Build Creditloan no longer than 36monthsknow before you oweAdequate Auto and Home Insuranceteens and moneymental healthPrime Rate Increasetelevision host4 Must Have Documents Forbes Top 10calculate dependents annual income needsconfidentnear historic lowsadult childrenStock Investmentsmobile appcnbc alarm clockvalue moneyspeak new goalnot gender specific no interestFixed Rate MortgageFederal Reserveshop online guaranteed level term policyAuto Savings 401Kjuggle multiple financial goalsrent vs buymarriage inequalityhigher insurance deductibleresponsiblelive below your meanshealthy retirement weightretirement planEmergency SavingsMortgage Credit Availability Indexmax employer matched 401(k) contributionlow-cost index mutual fundHSA tax savingsGay Rightsone credit cardcontribution don't extend mortgage is it true? don't buy wantslong term carepeace of mindbuying a carstandard rategay marriage ban end Florida 2015 financial roadmapunsubsidized Stafford loanMoney-Savingcostly insurance mistake30 year mortgage public service career student loan repayment 8 month emergency fundraising interest ratesFiscal ResponsibilityGiftFICO at least 720percentage men widowed 75-84Long Term Care premiumsgrandchild summer job IRA contributionBankkids schedule paymentsdon't cover cosmetic dentistrycommunity bankfinancial aidconsider roth 401(k)doctor no longer in networkpositiveone annual feeretirment savingscompare monthly expenses3 savings buckets financial argumentspresident Obamaritual schedulecredit union3 bucket approachdream schoolteach importance of helping othersNewtownsave at worst still pay 75% benefittitle insurancemax benefit coveredstudentpay off debtget over life insurance phobiauniversal college accessadd teenmoney-aware childwrite new goalcredit cardnew carmoney vowswomen longer life spanautomatic withdraw to savings Minor Children Staffords this year have a fixed 6.8% interest ratesave moneysmall changes lower mortgage interestraise insurance deductibleinitial tax break would you decline a bonus20 to 25 times annual income20% down payment avoid feesmortgage disclosurebest interest ratesmortgagelower rate20% equitytax refund fraudUS Tax CodeSuze is my biggest mentordear suzeCory BookerLong Term Care Insurance rising home pricesVeterinary SchoolRetirement Incomeno negativitySelectQuote.comhome insurancecar buying mistakesfinancial goal phrasechildren's bookFinancial Awareness Video Festival10% donate to charitypay down student loan debtstore credit cardshigh deductible health care planRevocable Trustsocial security never insolventcharges on credit cardroth iraterm life insuranceLovegift not loanface your financial fearheartachebe kind to yourselfincrease retirement contribution ratebad retirement planningbetter loan dealsSuze Orman spouse Kathy Travisoverspend on dining outrolloversuccesssame sex marriage band end Floridano retirement funds for down paymenthome ownershiponly refinance if it payssocial workholiday spendingfinancing car monthly benefit 10 year repayment plan AccuQuote.comreplace permanent life insurance with termcommitraise deductiblesFree Debt Eliminatorspecial saving accountlong-term care premiumslife insuranceenjoy saving financial fearssummer job match income push yourself to save more for retirementno fee transfertraditional vs roth 401(k)physical healthARM CautionJose Rodriguezcommunity collegeautomate student loan paymentsdon't ignore open enrollmentFinal Goodbyeaffordable premiumavoid burn outcar leasinggrandparent IRA contribution dental discount planworst financial mistakesavingsfull retirement ageSuze approvedstretch out haircut appointmentsemergency fund low mileage discountback-to-school budgetbill paying prioritiesspring summer Suze Orman Scholarshipprescription tierno life insurance financially irresponsibleadjust allocations Gay CouplesUniversity of IllinoisretirementStudent Debt Crisis3% debt transferred always use all paid time offFinancial Solutions For YouSuze Orman's Money WarsThe Suze Orman ShowInterestfraudulent return20% down paymentChanging LivesSuze changed my lifeclosing disclosureallowance taskpercentage of women widowed 75-84best interest of investorGoodbyehome buying budgetRichDurable Power of Attorney for Health Carefinancial independenceshort term goal 2017 Taxeslet them have 50% controlAARP Social security calculatoremotional stakesinsurance yearly reviewemployer funding HSAprotect and provide for minor child not enough life insurancequick closingHDHP's are good for youplanopen enrollment review Student DebtCPI-Wprofessional advisorcostly legal buy homewomen outlive menbig results marriage financial responsibilitypermanent life insuranceHDHP'sSave Us Moneybuy down paid in fullFederal PLUS loanreduce withholdingsame-sex marriagezero rate transfer dealswomen long term carePost-DivorceCiti Simplicity Card Credit Card Interest Ratecredit managementbuying car 2016identity theftconfident of solutionorigination feesearn more on savingsCOLAverify wellness screening and programsbecome member switch to spouse coveragehome budget after tax costPersonal Financehigh FICO scoreUniversity of Floridakid borrow firstaccelerate dental workForbesraise your deductibleinsuranceloved ones dependent on incomepay high rate off firststaycationannual cost of living adjustmenthealthy yourefundborrow each year, capitalization is going to pile up commissionsAmericans don't use all paid vacation timeARMhome related tax break bonus switch to roth 401(k)PBS Specialshorter payback periodbest loan deal Influentialsincentives for health care wellness screeningpay 100% cashbad decisionscollege graduatestay positivepreexisting condition not coveredtoo expensive schoolWillchildren under 18affordabilityincrease emergency savingsOverspendingOne Wallet At A Timelower overall drug costfiduciaryAshley SpringerExhibitiondangerous retirement planLong Term Care shoppingcredit reportLTCi ASAPdangerous money seasonfinancial concernstandard deduction Civil Rightsloan necessityMoneygift up to 14,000Marlo Thomashealthy teeththree year car loandeath benefit 20 to 25 times annual incomeIRA contribution gifted moneyhealthy retirement blood pressureSwap Older Annuities or Life Insurance 6 month waiting periodoverspend on nights outfamily save at least $100 monthlyAmy Lacyetfour steps to retirement savings Lifestylereduce interest rateno private loansNew York Lifehighest possible benefitidentity fraudCNBCMost Influential Celebrities Listsavings pleasure50 over 50Sandy Hook Elementary SchoolFunds8 Rulesrequired disclosureLegal Guardianbetter loan ratesreal estate marketpay more than minimumalternative FICO scoreexercise reguarly19 years cash flow problemfile taxes quicklydeath benefit needs for familyTeachsocial security not going brokedebt freeprotect dependent student loan repaymenthigh down paymentMust Have DocumentsMass Mutualfocus on needs!00% tuition paidis it necessary?ignore 6 month grace period long term goalConventional loan PMImake saving a pleasurecouple financeskeep a scheduleSuze Ormancreate new truthFinancial Adviceback door Roth IRAget the most out of social security Bill and PennyHDHP/HSAoverspend on giftsovercome financial fearsinterest on student loansretirement accountsMoney MarketWall StreetescrowFinancialstudent loan repayment planMotherFederal Stafford loanlearn good financial choiceslife insurance name trust as beneficiaryincreased auto insurance premiumhousing marketmanage student loanslowest cost fund optionAlarm ClockCollege of Veterinary Medicine740 credit scoreFICO credit score credit card mortgageallowancefile asapDeath Benefitrepay student loansHolidaywives should be involved in retirementeight month living expense lower interest rateRevocable Living Trustgift grandchild IRA contributionsocial securityInflation Benefitincrease retirement savingsTelepicturesdon't blow tax refundemployer offered life insuranceteach your child good money habitsRoth 401(k)no splurge Spending15-year refinance dealinterest capitalizationengaged in financesHeartderailed planautomatic paymentwaive home inspection bidSatisfyingHDHP's are not badeliminate credit card debtWashingtonget health insuranceapproved medical 100% tax-freeFICO Scorereferrals Gracepremiumsecured cardhigh credit score discountFRAvalentines daydepreciating asset age appropriate choreRetirement Savings

View Blog & News List
People First. Then Money. Then Things.
Connect with me on Facebook Connect with me on YouTube Connect with me on Twitter
© 2017 Suze Orman Media Inc. All rights reserved.
 |  Search  |  Sitemap  |  Privacy  |  Terms
Sign Up For E-mail Offers
Open Panel
Close Panel