What’s the big deal about HSAs?
A Health Savings Account is sometimes referred to as the “401(k) of Healthcare”. It’s true – the money goes in the account pre-tax and if the funds are spent on healthcare, there are no taxes on the funds withdrawn from the account. At the age of 65, an account holder (often referred to as an HSA Saver) can withdraw the funds for any expense – healthcare or non-healthcare – with no penalty, taxed at his current rate. One critical differentiator between IRAs/401(k)s and HSAs is that an HSA participant can redeem money from his HSA for his expenses at any time in the future with no tax or penalty implications. The HSA participant can seek reimbursement immediately after an expense is incurred or he/she can save the medical receipts, while putting money away in the HSA, tax free, earning interest tax free, and access the account for reimbursement at a later time. In 2011, maximum contributions to an HSA per year are $3,050 and $6,150 for individuals and families respectively. In 2012, max