NEW YORK MainStreet) - A Health Savings Account, or HSA, is a much-overlooked form of making your money work better for you. Created in 2003 for Americans with high-deductible premiums, the HSA allows you to sock money aside for health care costs. Particularly for younger, healthier Americans, this can be a godsend: rather than throwing money away on high health insurance premiums, you can sock the money away for future expenses. But make no mistake about it: HSAs are for everyone. Here's how to get the most out of yours.
How Much Should You Put in an HSA?
Mike Sullivan, director of education for Take Charge America, is rather blunt when it comes to HSAs.
"Don't forget -- this is a consolation prize for having really bad insurance," he says. To that end, he suggests that you have at least enough to cover your deductible in an HSA before you even start thinking about spending it.
"For some people," Sullivan points out, "that's going to take years of contributions before they have the out of pocket risk covered."
Still, Carrie McLean, director of customer care for eHealthInsurance.com, points out that an HSA doesn't necessarily have to be for people who can't afford good insurance.
"You can lower your premiums and put the savings into an HSA," she says.
The upside to this is not only that you're banking money for the future, rather than spending it on premiums, you're also saving money you can use in your retirement. Best of all, it's fully Obamacare compliant.