Health savings accounts have been slow to catch on, with good reason: To qualify, you must enroll in a high-deductible health insurance plan. For 2013, that means a deductible of at least $1,250 for individual coverage or $2,500 for a family.
Soon, though, you may not have another choice. Among large and midsize companies, 10% now offer a high-deductible plan as their only option, and 44% are considering moving in that direction in the next three to five years, reports a survey by Aon Hewitt, a human resources consultant.
Employers are turning to these plans in an effort to cut costs, says Aon Hewitt’s Maureen Fay. And if you’re healthy, they can be cheaper for you, too, because premiums are often lower than those for traditional plans. But if you need medical care, you could be hit with steep out-of-pocket costs.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
An HSA allows you to make pretax contributions to a fund designated for those expenses. The money grows tax-deferred, and qualified withdrawals are tax-free. Plus, you can sock away a bundle. In 2013, you can stash up to $3,250 for individual coverage or up to $6,450 for family coverage. If you’re 55 or older, you can contribute an additional $1,000. That’s a lot higher than the $2,500 limit on contributions to a medical flexible spending account. And many employers will kick in to your HSA or match contributions.
As is the case with an FSA, you can use money in your HSA for deductibles, co-payments and other expenses not covered by insurance. But unlike with flex accounts, you don’t have to spend all the money by year-end. You may leave the money in your account until you need it, and take it with you if you change jobs.
-
What Is a Qualified Charitable Distribution (QCD)?Tax Breaks A QCD can lower your tax bill while meeting your charitable giving goals in retirement. Here’s how.
-
Embracing Generative AI for Financial SuccessGenerative AI has the potential to reshape how we approach learning about and managing our personal finances.
-
457 Plan Contribution Limits for 2025Retirement plans There are higher 457 plan contribution limits for state and local government workers in 2025 than in 2024.
-
Medicare Basics: 11 Things You Need to KnowMedicare There's Medicare Part A, Part B, Part D, Medigap plans, Medicare Advantage plans and so on. We sort out the confusion about signing up for Medicare — and much more.
-
The Seven Worst Assets to Leave Your Kids or Grandkidsinheritance Leaving these assets to your loved ones may be more trouble than it’s worth. Here's how to avoid adding to their grief after you're gone.
-
SEP IRA Contribution Limits for 2024 and 2025SEP IRA A good option for small business owners, SEP IRAs allow individual annual contributions of as much as $69,000 in 2024 and $70,000 in 2025..
-
Roth IRA Contribution Limits for 2024 and 2025Roth IRAs Roth IRA contribution limits have gone up. Here's what you need to know.
-
SIMPLE IRA Contribution Limits for 2024 and 2025simple IRA The SIMPLE IRA contribution limit increased by $500 for 2025. Workers at small businesses can contribute up to $16,500 or $20,000 if 50 or over and $21,750 if 60-63.
-
457 Contribution Limits for 2024
retirement plans State and local government workers can contribute more to their 457 plans in 2024 than in 2023.
-
Roth 401(k) Contribution Limits for 2025retirement plans The Roth 401(k) contribution limit for 2024 is increasing, and workers who are 50 and older can save even more.
