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My first real job with benefits was working at a design firm as a courier. With the internet still in its infancy, we had to deliver files to our customers and this is where I came in. It was a fun, entry-level job that allowed me a backdoor to eventually become a designer.
One of the neat things about working at this firm was its small, family-feel. Everyone seemed to work well together and had a good time doing the work.
Looking back, a unique perk of the job was the health insurance plan we received. While I thought it expensive at the time, I paid something like $50 every paycheck to be fully covered for health insurance.
That’s right, 100%, full coverage.
Today, this type of coverage is virtually extinct and if you have something close to it (like I’m fortunate to have at my current workplace), count it a blessing.
Healthcare is just getting too expensive and so many employers are trying to shift more of the burden back on to the employee. One of the ways employers are doing this is through higher-deductible health care plans (also called HDHP).
What is a Health Savings Account (HSA)?
As a result of these higher-deductible plans, health savings accounts were created in 2003 so individuals could “receive tax-preferred treatment of money saved for medical expenses.”
There are other vehicles people can use to put money away that have tax advantages, like the flexible savings account (FSA) and health reimbursement account (HRA).
The advantage of the HSA is an individual owns this account and it can accumulate from year-to-year, while earning interest. With the FSA, the pre-determined funds must be used up in that calendar year. (Though new tax rules allow individuals to roll-over up to $500 from the previous year).
For my family, we have used an FSA as a way to get some extra tax savings – even though I’ve never liked their rigidity and “on-credit” premise.
Is an HSA for you?
Personally, I would say most of us could use an HSA or FSA for getting a little extra tax savings when we pay for medical expenses. It’s almost like having a discount card when you pay the co-pay, or pick-up your prescription because these costs are now tax-advantaged through an HSA or FSA.
To enroll in a HSA, you’ll need to be a part of a high deductible health plan (HDHP).
And, there are some IRS considerations:
Based on 2019 IRS specifications, qualifying HSA health plans must have minimum deductibles of $1,350 for individuals and $2,700 for families. In addition, qualifying plans must have maximum out-of-pocket amounts of less than $6,750 for individuals and $13,500 for families.
Annual HSA contribution limits for 2019 are $3,500 for individual coverage and $7,000 for family coverage. If you have a mid-year change – like moving from self-only coverage to family coverage, or vice versa, then your annual contribution limit changes.
Where can you get an HSA?
You’ll either fall into one or two categories when it comes to an HSA. Either your employer will have a plan all set-up for you to sign-up for or you can open one up at your place of choosing.
One place to consider is, Lively. We heard about them a couple months ago and they offer individual HSA plans OR will help employers looking to offer their staff HSA plans.
A few things that set them apart are:
- No monthly fees just to have an HSA
- Free for individuals & families
- FDIC insured, interest bearing
- Free to access investments (optional)
They also have a slick, quick(er) sign-up process which takes about 5 minutes or less.
Users can also choose to sign-up for a TD Ameritrade account to invest funds there – 100% free. I think this is one of the more unique features of Lively. Add to that, the fact that all of ones growth, is tax-free.
HSA’s offer the ability to keep the money that you have in the account. This money also earns interest while it sits there. So, not only are you getting tax advantages to the savings, it is earning interest AND (if you choose) through how you invest it.
Do you have an HSA account?
I’d be interested to know if you have an HSA account and how it has benefited you and if you’d recommend it to others? OR – if you’ve tried them / have an account – what your experience with Lively is?
Update 4/12/19: Lively now has a working iOS app! (Android version still in the works).
This post was brought to you by Lively. All opinions expressed are our own. TTG may earn a commission on any accounts opened up via the links on this page, at no cost to you. Thanks for helping to support the website.