HSAs—the fantastic, good, bad, and the ugly

by Steve Neeleman

HSAs are becoming more mainstream.  Studies suggest that over 20 million families have HSAs and total cash and investment balances are now approaching $50B.  Most of the HSA growth comes employer offerings to employees.  Approximately 50% of all employers are now offering HSAs, largely because of the premium savings that accompany the accounts and the remarkable tax savings and long-term retirement opportunities for their employees.  With all the positives of HSAs, after 15 years, they still suffer from perception problems because of the required partnership of high-deductible health plan (HDHP),” the fear that people will avoid care because of the higher deductible, the lack of true pricing transparency, and overall lack understanding of the benefits of the accounts.   Many people don’t even know that HSAs aren’t use it or lose it like FSAs. Also, HSAs need to be expanded so that Medicare and possibly Medicaid recipients can continue to make contributions to accounts.  It would also be fantastic if people on TriCare and Indian Health Service medical coverage could contribute to HSAs. Washington can help HSAs if they can get their act together.  We all need to be committed to improving the accounts as they represent the best long-term solution for good health coverage for Americans.