#130: The 411 on HSAs
Josh and Emily briefly discuss “what is an HSA?” and then dive into what financial coaches should think about when talking to clients about HSAs, including potential red flag areas.
Top things to think about
- You have to have a high deductible health plan (HDHP) to qualify for an HSA.
- Feel free to do the math, but anything beyond, “the simple math says it’s worth it/not worth it,” may be best left to a comprehensive financial adviser.
- Consider the implications of possibly switching insurance to a HDHP–what does it impact beyond cost?
- HSA contributions are not part of the standardized deduction.
- If you’re going to use all of the money you contribute to an HSA, you should probably be using a lower deductible plan and contributing to an FSA instead of the high deductible plan and an HSA.
- HSAs make the most sense when there is enough free cashflow to pay for medical expenses out of pocket and contribute to the HSA to invest for the future (and this is when you need an investment licensed person to give advice).
- Broadly speaking, the same expenses qualify for FSA and HSA reimbursement (but you can’t legally double dip).
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