As more organizations study the Cadillac tax’s implications, it’s becoming clearer that even plans more could trigger the payment. The American Bankers’ Association set out to investigate what the tax’s effect on health savings accounts might be. What the research forecast was that nearly a quarter of existing health savings account plans would trigger the tax as it currently is written — but that just 3 percent would actually have to pay the tax in 2018.
It is quite possible that it is smarter to use your HSA dollars for health expenses this year rather than letting them compound for decades and then using them to buy a boat, but there are 7 guiding principles that should be applied when deciding how to use your HSA.
Many employed Americans have a second retirement account available to them other than the Individual Retirement Account or 401(k) opportunities, and should consider funding it to the maximum of their ability. Health savings accounts is a way to create a fund that can pay for the much-feared cost of post-employment health care in the United States.
Health Savings Accounts Gain Acceptance as Retirement Tool
Health savings accounts have exploded in popularity in recent years, but experts say they’re not living up to their potential as savings vehicles for retirement healthcare costs. Research suggests that HSA holders aren’t thinking of their account as the long-term, retirement savings vehicle that it could be.
Last year out-of-pocket medical expenses soared 11 percent, according to TransUnion. And since health care is typically one of the biggest budget busters, there’s a good chance you have to re-examine your own spending or re-think how you plan to cover costs.