The Real TRUTH About An HSA - Health Savings Account Insane Benefits

[@JarradMorrow]

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[@azaria8825]

Is there a reason you split your HSA between Fidelity and Lively? Also, what if you get laid off...is it worth paying into it, given you are paying taxes, etc...?

[@tableround3019]

I am with Health Equity, but getting tired of paying them nearly $100 per year. I am self-employed with roughly $33,800 in HSA and contribute the max single rate amount per year. I researched Fidelity, but can’t seem to find the “bottom line” regarding expenses. Hoping you can help: If do self invest, what are the annual fees? And is there a fee for buying investments when I send contribution each month? Thank you

[@JarradMorrow]

The only reason I split it between the two is to keep myself educated on how multiple providers work for the sake of being informed when creating content on KZbin. If I wasn't a content creator then I'd have all my money in 1 HSA provider to simplify my finances.

[@JarradMorrow]

A Fidelity HSA account does not charge any fees. They also have an account called a "Fidelity Go HSA" where they charge you a fee. The reason they charge you a fee with the "Go" account is because they manage the account for you. I do not recommend using this type of account.

[@tableround3019]

@@JarradMorrow Thank you. I looked at them once upon a time, but wish their disclaimer was worded better - as it scared me away since it implied there were fees. Thank you for sharing your experience, and recommendation, as I am going to transfer funds to them. Thank you.

[@barrellcooper6490]

Small point of clarification: the HSA contribution does on the tax return as an adjustment to income, not a deduction. This means it lowers your "adjusted gross income". It's better than a deduction.

[@JarradMorrow]

Thank you for correcting me 👍🏻

[@johnanon658]

@@JarradMorrow bro, are you limited on what you can invest in w HSA money? Can you invest in individual stonks, or only things like index funds??

[@JarradMorrow]

Depends on the HSA provider bc they’re all different. With Health Equity i invested through their front end platform (not sure which brokerage they worked with on the back end) and I was limited to about 15-20 funds. With Fidelity and Lively I don’t see a limited amount of investment options so I guess you’re able to invest in anything

[@mtunofun1]

@@johnanon658 My company’s HSA provider has a small list of indexes. It’s not the worst, but could be better. I currently invest my HSA funds is SWPPX, Schwab’s SP500 index.

[@johnbrewer1430]

I was going to owe $600 for the 2021 tax year until I entered my HSA contribution in Turbo Tax. I got $1600 back instead. I max mine out every year.

[@brucekalter4206]

Hi Jarrad. One other important thing to note is this: If someone is planning on enrolling in Medicare, you must STOP all HSA deductions from your paycheck 6 MONTHS PROR to enrolling in Medicare. It's kind of a stupid rule, but it's important if someone is going to retire in the near future or is 65 or older & wants to switch from their High Deductible plan & wants to switch to Medicare.

[@JarradMorrow]

Thanks for sharing that additional info 👍🏻

[@kristinabbot9112]

I just learned it depends on when you start on/apply for any part of Medicare. This is how I understand it, but if anyone has any corrections, please share! If you want to start within 6 months of your 65th birthday, the cutoff to contribute will backdate to the 1st day of the month of your birthday. (Except for someone whose birthday is on the 1st, it goes back to the 1st of the month PRIOR to your birthday.) So you (and your employer) can contribute through the end of the month before your birthday. If you apply for coverage later than six months after you turn 65, the cutoff to contribute will backdate to the 1st day of the month 6 months prior to APPLYING (NOT 6 months from when coverage starts). So you can contribute through the end of the 7th month prior to applying. I'm sure you'd be charged fees if you contribute within that 6 month period, so it's best to plan ahead. But obviously you can't always predict 6 months in advance that you'll need to go on Medicare. Also, you can't max out your contributions before the cutoff. You can only contribute a pro rated amount. For example, if your cutoff to contribute is May 31st, you can only contribute 5/12 of the government allowed max for the year.

[@Paul-GrnHil]

Great content. I maxed out my HSA as soon as it was offered at my employer and only dipped into the account once when my daughter had an appendicitis. I kept $3500 in the HSA cash account to avoid any fees and invested the rest in a growth fund. After 14 years of participation, when I retired last year I had $200,000, enough to cover our expected medical expenses for my wife and me for our retirement years without having to take taxable distributions from our IRAs. (We also have a LTC policy to cover possible nursing/home care.)

[@jnordman86]

I'm about to start this now, great to see a real-life example!

[@Paul-GrnHil]

@@jnordman86 Jesse, I am a retired CFO who started the HSA at my company. If you can max out your contributions and avoid using the funds as much as possible AND move your excess balance to investments, you will never regret it. I can’t tell you how great it feels to know I’ve saved for all/most of my retirement medical expenses. Good luck.

[@DILLSOLO]

@@Paul-GrnHilawesome tip. I’ll do the same, thanks.

[@moens404]

where or with whom did you invest your HSA money?

[@Paul-GrnHil]

@@moens404 While working, my HSA was with HSA Bank. They have a regular cash account and different investment options; I chose a SP500 fund. Now that I am retired, I moved the account to a Fidelity HSA/SP500 fund.

[@smokeyj3983]

I had 3400 in my HSA. I invested it, then the market tanked. My daughter then had stomach problems, medical expenses came to a tune to $4800. This was a very tough time for me. I left the money in the HSA and it's still way down. Life sometimes doesn't work as you describe.

[@JarradMorrow]

This is why you don’t invest money you need within a short period of time. Thanks for the reminder of that lesson 👍🏻

[@obie1coby]

Yeah he nailed it. Have your emergency fund first, then start investing

[@JarradMorrow]

I’m also sorry to hear about the stomach issue with your daughter. Hopefully she’s well and everything worked out from a health perspective.

[@smokeyj3983]

Thanks guys, she's doing well. I have recovered and on my way to 3 months of emergency fund.

[@mtunofun1]

For that reason I always have enough cash for the deductible. Anything above that gets invested.

[@nickv4073]

I did exactly the same thing some years ago. Transfer from Health Equity to Fidelity. Best move I ever made. Better fund choices and no fees. One thing to note. Even if you are 100% healthy in retirement and have no medical bills, you can still withdraw tax free every month to cover Medicare Part B premiums. For a married couple, that would be about $340 income every month tax free.

[@JarradMorrow]

Thanks for sharing that additional info 👍🏻

[@DestinationRetirement]

I think you can reimburse yourself for all the out of pocket expenses you e paid as well track them. Fidelity has FidSafe for tracking.

[@DestinationRetirement]

I did the same. Fidelity. Bummed my CPA did not tell me about this years ago. I’m only 3 years in right now. Every Jan I pu the max in.

[@kgal1298]

My employer uses health equity now...lmaooo ugh, but it is what it is.

[@darlin5167]

I’ve had an HSA for years. I’m now starting on Medicare and will reimburse myself for the premiums. So glad I made that decision!

[@dtsb123456]

I have an HSA with Fidelity and had been investing a portion of my account balance. The better path for me after talking to an advisor from Fidelity was to have my full deductible available ($1500) as cash for medical expenses as I don't have a ton of disposable income. If/when the balance goes over the $1500, the contributions go to my investment account. I wish I had had one of these accounts when I was younger!

[@JarradMorrow]

This is a great way to handle it. Thanks for sharing!

[@eltigre5469]

Me as well. Discovered late in my career but maxing out whatever years I have left to work. Not a single person in my building knew anything about it. Never heard of it. I learned from KZbin videos and got started right away.

[@JohnJohn-wr1jo]

I retired at 63 3 years ago. I was fortunate that I recognized early on the multiple benefits of an HSA. I contributed the max every year for almost 17 years and invested 100% in diversified mutual funds. The last 12 months hasn't done well obviously but when the need to draw on it or to repay myself hits I'm well ahead of the game with the tax benefits and growth accrued. To me its an additional layer of protection or insurance with a great tax advantage. I never understood why many of my coworkers wouldn't take advantage of it.

[@niasteadley]

Perfect timing with Open Enrollment happening! I can share this with my friends and fam instead of having to explain it myself 😊 Thank you!!

[@JarradMorrow]

No problem. Hoping they find it helpful!

[@sridhar125]

Good explanation for newbees. One other flexible way to use HSA, is to keep ALL the medical receipts (that you pay out of pocket) over the years and when you are in a pinch, you can submit the old receipts to reimburse yourself (even if you are currently not having a medical expense). So if you need extra money for a sudden hawaiian vacation, you can turn in few old receipts and tap into that money. This is perfectly legal.

[@JarradMorrow]

Good callout. It's something I mentioned in the follow up video to this one: kzbin.info/www/bejne/qqPcc3Vtl5yEirM

[@yuckyool]

Seriously. yes. We've been maxing out our HSA for 4 years now (yes, I wish I started way earlier . . .). Each year, we have way over $8k of reimbursable health expenses, that we have NOT taken. The more the better. When we retire, if we want, we can hold on to all those receipts and reimburse ourselves $40K or more . . .

[@S.A.1]

Thanks so much! A great video for a noob like me! Just want to confirm I understand this right- you said that even when I am employed with my company, I can move my HSA a money to fidelity. Is this true? Thank you!

[@happygilmore1844]

What about self employed people? Can we purchase our own HSA account?

[@lacerav5818]

​@@happygilmore1844yes

[@ThatLittleTexanWoman]

I was helping a relative choose an insurance plan. The difference each month between the PPO premium and the HDHP premium was the same as the max HSA contribution. That meant switching from the PPO to the HDHP/HSA meant no change in her take-home pay! She started paying herself each month and when she had a hospitalization a while later she had plenty to cover it with some left over. It has worked out really well for her even with some minor regular medical expenses.

[@briand5379]

I have Fidelity for both my HSA and 401K, and they charge a fee every quarter on both. Something else to add people need to be careful because HDHP is a health plan designed for people that seldom need to use their health insurance, so you're paying most of your expenses out of pocket. If you're older or have health issues, and you choose HDHP, you'll spend significantly more out of pocket for your medical care than a PPO.

[@pijoseb]

Another great feature of HSAs is that you can reimburse yourself for any out of pocket, qualified expenses made after the account was opened. That means, for example, if you spend $1000 on medical expenses, you can withdraw that money any time in the future to pay yourself back. Thus, if Investor Ian kept receipts for that $115,000 in medical expenses he had, he could theoretically withdraw all of that money tax-free, after letting it grow for decades.

[@SavageBits]

That's a super valuable point not made in the video! Save all your unreimbursed medical receipts into a gmail folder or google drive. Then in the future if you had to dip into the HSA, you could pull out money tax free up to the amount of your saved receipts.

[@piggjf]

Most HSA providers have a place for you to upload these receipts, too. Agree that this is a super valuable point and really thought he would highlight it in the video.

[@Chelsea4ever27]

Wait what! This info is golden!!

[@2214drk]

exactly. And that is the biggest benefit of all. Just keep those receipts organized!

[@juliequates9529]

Why wouldn't you just pay the $1k with the account at the time of the cost being incurred?

[@JuliusKhoo]

Good luck on your channel man! I see great potential in it, and you cover such important topics I think more people should know about with a greater depth and important considerations than other content creators.

[@JarradMorrow]

👍🏻

[@d_all_in]

Great video. I originally signed up for an HSA but found the reimbursement process confusing and inconvenient compared to traditional insurance. This makes a lot more sense.

[@JarradMorrow]

👍🏻

[@carsonbaugher4671]

Just remember that. High Deductible Health Plan requires all medical procedures, copays and dr’s visits to apply to the deductible. This typically increases the cost of care for the smaller items (Dr. Copays and prescription drugs). HDHP’s are really good for people who never use insurance throughout the year or someone who maxes out their deductible quickly- if you are in between I’d highly recommend talking to your employer or broker for guidance

[@Chris-hr2uj]

Im glad you posted this- i was going to as well. Its important to be informed of all advantages and disadvantages before making a financial decision. High deductibles can be a big deal for someone who doesnt have sufficient cash available for annual medical expenses. However, another thing to remember is that medical insurance premiums are cheaper for HDHPs than other health insurance plans.

[@nadavegan]

I would talk to someone other than your corporate HR drone. They have no idea.

[@leajohnson10]

Exactly!

[@sblb9852]

There are a few things that you have forgotten - 1. HDHP plans have significantly lower premiums. Thus, you are saving on fixed costs vs variable costs. 2. Often, not always, the annual out of pocket max is less than with other plans. As some who has already had 2 operations in 2022 and another one in 2 weeks = the HDHP PPO has saved me $2480 from the Platimum PPO. HDHP = $408 monthly premium + $7500 out of pocket max = $11896 Platinum PPO = $823 monthly premium + $4500 out of pocket max = $14376 With the same provider network.

[@sblb9852]

@@Chris-hr2uj If you don't have a lot of cash, how are you going to pay the FIXED COST monthly premium???

[@j.l.cooper70]

I'm a new subscriber! Added tip: I also found out i can contribute to the previous year until April of this year, which will lower my tax bill!! Thanks for spelling everything out for me with so much clarity!

[@jeromeschmidt7805]

I used to teach the benefits of the HSA out to my teams. If you’re even remotely healthy, this is the route to go. You will save so much. Our family’s account is huge, and it could’ve been just wasted money on premiums. HSA all the way!

[@JarradMorrow]

You sound like a great co-worker 👍🏻

[@doggietreats67]

hopefully, you don't have any unplanned medical issues requiring emergency care. "healthy" people will appendicitis or Gallbladder issues. your savings will be wiped out from the hospital blll.

[@FRANKYGURL]

​@sachinvaikunth this us what I'm afraid of! I don't have any medical issues now but never know what can happen! 😢

[@AliGee_]

@@doggietreats67 HDHP's have out of pocket maximums.

[@christianb1176]

I found the HSA to be far superior to my employer's high premium options. If you and your family are relatively healthy, the HSA is an easy choice, especially when an employer puts in money, too. I'm saving a few thousand every year easily.

[@JarradMorrow]

Thanks for sharing your experience 👍🏻

[@Nick-Edwards]

I am stuck right now. My employer pays 100% of any insurance plan I want. I am 22 and have type one diabetes so I spend a lot of money on insulin and supplies. I am not sure if I should do a HDHP or a PPO.

[@savinayn]

I’ve had an HSA for years, but always fell into category #1 (spending from the HSA). Now I know so much better thanks to this video. Thank you for this!

[@JarradMorrow]

Good to hear!

[@dachicagoan8185]

Don't spend from the HSA. Build another savings account or your HSA will never grow as intended. Get a 2nd job or budget better

[@crusader0657]

I am super mad at the 7%. I think 6.99% is a much more realistic number.

[@JarradMorrow]

😂 you would be mad about that. I need that extra .01% return so I don't go broke trying to feed all these damn birds I now have in my back yard

[@crusader0657]

@@JarradMorrow 😂

[@JarradMorrow]

I'm blaming you for showing me your bird feeder set up 😂. Expect a phone call from my future wife when she's pissed I'm spending more time on my birds than her.

[@fatmanchew909]

I use to pay for the best plan, but I realized I never use my medical but always have issues with my dental. Went with the cheapest plan and did the math on the difference and put that amount away in my HSA. I have $10k sitting in my HSA instead of giving it away to the health insurance industry. Best investment is knowing that when I retire I have an account that's going to help me from having to choose between my medical care vs eating.

[@fred-chang]

Great video! Just a minor note for CA, NJ residents: Because these states do not recognize HSAs, your HSA contributions are not tax deductible for California/New Jersey state income tax.

[@JarradMorrow]

Thank you for calling that out 👍🏻

[@erivers71]

Your talking about state taxes but not federal. I live in Virginia and am in low tax bracket so my federal income tax rate is 12% and state is 5%.

[@Kay-kg6ny]

Yeah I was really surprised the video didnt bring up the fact that HSAs arent really beneficial in some states

[@vxicepickxv]

@@Kay-kg6ny without a group of tax lawyers to search every state, it's almost impossible to check every law in every state.

[@mattmarder4390]

Best HSA video on KZbin. Truly a game changer for me as a self employed live music industry worker and personal finance nerd. Thanks man.

[@stephenroberts2526]

I favor a hybrid approach to my HSA. I am almost to the point of having my annual out of pocket expense saved up. I should be a little over that at the end of the year (a little over a year of contributions). From there, I plan on investing the next year's contributions. Lather, rinse, repeat until I retire. I like the idea of having a whole year of medical expenses covered, without touching credit lines or regular assets.

[@JarradMorrow]

👍🏻

[@tinalewis6782]

Good video! Three quick things: Unlike a traditional IRA, there are no required minimum distributions attached to an HSA account. This means you won't be draining the funds if you're healthy. The second thing is after your death your spouse (if named as beneficiary or designated as such in other estate documents) can use your account just as if it were their own HSA account. Third - once you enroll in Medicare, you won't be allowed to continue contributing to your HSA, although you can certainly continue investing and withdrawing. (These tips are subject to change, of course.)

[@JarradMorrow]

Great callouts. Thanks for sharing 👍🏻

[@tikimann9300]

@Tina Lewis , so as a social security recipient and enrolled in Medicare ( still employed , so I have Kaiser Medical Insurance too ) … I can’t sign up for an HSA at open enrollment next month 🤔 ⁉️

[@27ftWhaler]

One other thing. Upon the death of the account holder and the spouse, the beneficiary of the estate must pay income tax on the value of what remains in the HSA

[@tinalewis6782]

@@tikimann9300 Per the IRS Publication 969: Qualifying for an HSA Contribution To be an eligible individual and qualify for an HSA contribution, you must meet the following requirements. • You are covered under a high deductible health plan (HDHP), described later, on the first day of the month. • You have no other health coverage except what is permitted under Other health coverage, later. • You aren’t enrolled in Medicare. • You can’t be claimed as a dependent on someone else’s 2021 tax return.

[@tinalewis6782]

@@27ftWhaler Maybe. "Per the IRS Publication 969: If your spouse is the designated beneficiary of your HSA, it will be treated as your spouse’s HSA after your death." This publication doesn't address what happens to the account if original owner and spouse are both deceased.

[@L_B2030]

I switched mine to fidelity and have it invested, love it especially with the fractional shares

[@JarradMorrow]

Nice! The fractional share investing is extremely helpful. Keep up the great work!

[@mybyrd8598]

This is the best video on HSA that I have ever seen, that it almost covers every thing that you need to know about HSA, good job!! I think I will forward it to my family.

[@JarradMorrow]

Glad it was helpful and thank you for the feedback. Believe it or not I have more info I wanted to add, but it would just be too long 😂. That info will be covered in a follow-up video.

[@mybyrd8598]

@@JarradMorrow looking forward to it!!

[@KenSiefert]

Stay in shape, eat right, and avoid anything from the government

[@danaxe407]

Just because I didn’t see it in the video; an HDHP plan also only pays for preventive before meeting the deductible all other services will be 100% out of pocket until the deductible is met. Then the copays/coinsurance applies until the Out of Pocket Max is met. Also the SBC document you showed “from your employer” is actually from the carrier and all health plans will have this document.

[@JarradMorrow]

Thanks for the info 👍🏻

[@Scott-nj9gq]

Great video. HSA is one of the best financial investments available. I max out my HSA out every year and pay all medical expenses out of pocket. I have moved the funds to an investment account and will use the funds later for Medicare premiums.

[@JarradMorrow]

Thanks for sharing your feedback 👍🏻

[@krehbein]

I hope your not saying you don’t have insurance? If so, that Hsa will be gone a day into an accident or health issue.

[@CharlesPanigeo]

​@@krehbein He has insurance. Contributing to an HSA requires being enrolled in a high deductible health insurance plan.

[@davidcloyd1296]

The work you put in is solid. The info is valuable. The dog is priceless. Thanks

[@JarradMorrow]

Appreciate it 👍🏻

[@Omego2K]

I did the math on this many times for my circumstances. I'm sick and I hit the out of pocket max every year which is 6550. While my employer adds to my HSA I calculated without that. I calculated by summing the out of pocket max, premium, and hsa contributions vs summing the Premium and out of pocket max on the copay insurance. I then calculated the left over money on the copay plan at different returns. Same with money in the HSA. Assuming a 20% tax burden on the non-high deductible left over then over the course of 20 years the HSA wins out at all rates of return. Of course this is unique to my situation as I will always hit the out of pocket max and will have the tax free return(or my heirs will)

[@JarradMorrow]

Sounds good! An HSA isn't for everyone. Good luck out there 👍🏻

[@williewonka6694]

Ive been pretty diligent with the HSA. After retiring, I moved it to Fidelity. This has proved far better than the few investment opportunities offered by my former employer. After retirement, Ive continued to fully fund the HSA and plan to do a partial contribution pn my last half-year of eligibility.

[@GDUBLEY]

My provider uses Optum and requires $2k before being able to invest. The charge a small fee to invest but they charge a flat $40 to transfer money to another HSA. Also Although I am in CA where the gains are taxable, it’s still worth while for the tax deduction

[@JarradMorrow]

$2,000?!??! Oh my gosh that would annoy me so much. AND they charge you to transfer money out?!?! Wow. Well if you ever leave that job then transfer all of your money to a new HSA provider to be done with Optum. Thanks for sharing your experience with this provider 👍🏻

[@wanderlust7020]

Yeah, I have Optum as well. What I found is that I could open a Fidelity HSA and have Fidelity initiate a partial transfer from Optum (no fees charged when Fidelity pulls from Optum!!). For me, the first step was to cash out the funds in the Optum brokerage account and move that cash back to the general HSA account to stop the $3/month brokerage account fee… but then Optum has another fee if your HSA account drops below $500. Now I can do future partial transfers initiated from Fidelity pulling funds from Optum HSA. Also, just keep track of OOP medical expenses in a spreadsheet and saving receipts electronically. If you need cash in the future for some unforeseen issue, you can “pay yourself back” for past OOP expenses

[@vogeljennifer6318]

im in the same boat with optum health. I have to leave 500 due to minimum they require and also thats where company contributes. The rest I move to Fidelity

[@dennisr5673]

@@wanderlust7020 How has this process been working for you? I'm in the same position with my employer/provider dealing with Optum and I'm glad to come across your post. I'm definitely going to look into this as well.

[@wanderlust7020]

@@dennisr5673 initial process worked great! Just make sure your funds are in the Optum HSA (not Optum Brokerage). Then open a Fidelity HSA account (probably would work with Lively too, but I didn’t try that) and from Fidelity, initiate a PARTIAL transfer (not a full) and put the details of you Optum HSA account. Make sure to leave at least $500 in the Optum HSA to avoid being hit with a fee from Optum. That way your Optum HSA remains open to receive future deposits from your paychecks. I haven’t done additional partial transfers yet, but don’t expect any issues.

[@Doak_85]

I think the HSA is great for single people or young people with no major health complications. If you have serious health issues that require constant treatment or occasional hospitalizations you may end up spending more than what the HSA has or are still paying through the nose for healthcare depending on the plan.

[@WackyIraqi777]

I max out OOP every year... HSA is still the way to go.

[@SVaya2018]

Great video, lots of good info. I have maxed and invested my HSA for years. My employer just switched to wealthcare investments this past summer. Terrible option, the fees are aweful. I moved it all to fidelity. Keep the videos coming!!

[@JarradMorrow]

Appreciate the feedback. Happy to hear you moved as much money as you could out of the high fee provider. I’ll make sure to warn people about Wealthcare’s high fees. Thanks for the info 👍🏻

[@TrainerAQ]

The HSA is the best thing I could have ever come across! It's my money which is saved before it gets taxed. So it lowers my taxes at the end of the year. I then can you that money to invest or use it to spend on medical expenses. I used it to buy myself a pair of eyeglasses that cost $600. It never even touched my day to day money. The HSA single handedly removed the idea of me having to pay for medical expenses cause there is always money saved for it! Now I'm going to be using it to finally get my orthodontics done

[@JarradMorrow]

This is great! Thanks for sharing your success story!

[@Mandy_39]

It was your day to day money though! You are acting as if that was free money though!

[@michaels840]

Not all HSAs are the same. The company that runs the HSA can determine whether there are costs to you once you leave the company that you work for you. This was the case for me. The company charged $5/mo fee to handle the account. This means that just having the money sit there would cost me $5/mo. If you had $1000 in an HSA that would be a 20% fee. Higher than the average tax bracket if I had taken the money after tax. AND eventually all my money would be gone if I never spent a dime for a service that was supported under the HSA.

[@JarradMorrow]

Thanks for sharing your experience. As I mentioned in the video, you can change HSA providers or move some of your money to avoid as much of the fee as possible 👍🏻

[@OnCashFlow]

I have had access to an HSA for the past 2 years, and I am maxing it out at the beginning of every year! One of the most strategic "retirement" accounts you can have!

[@JeffreyQProductions]

Solid video Jarrad. I opened up an HSA with fidelity two weeks ago (using your prior HSA vids as a guide) as my current employer has no idea what HSA's even are. I deposited $7,300 for my family and did an 80/20 split between a total S&P 500 and Global International. I will now forget about it till January, when I'll do it again.

[@JarradMorrow]

Smart! Happy to hear you took the extra steps to open and contribute to an HSA even though your employer doesn't offer one. Your financial future is going to be better off for that. Nice work 👍🏻

[@ihaveadreamformykids4400]

I thought you need to be in a HDHP plan to be eligible for HSA. Good luck

[@CrankySnowman]

​@@ihaveadreamformykids4400 yes, you have to be enrolled in a high deductible health plan

[@CreativeMindsAudio]

The fact that this video needs to exist is insane. Imagine if we didn’t have any healthcare expenses passed the premium?! I’m on an HSA and contribute enough to nearly cover my 3k max out of pocket/year. And since medical costs are so insane it’s likely I’ll hit it next year. I signed up in September and I’m almost at 2k of expenses (my deductible is 1.5k) from just one (current) illness and few doctors appointments. Considering my paycheck isn’t enough to survive on my own in my city, it’s pretty crazy when you factor in missed pay at work and insane medical expenses. My savings goal is 6 months of full expenses + full out of pocket health insurance expenses. But i know from experience it’s probably better to have a year of expenses saved up, but that would take a very long time for me to do and I’m in a living situation that is good financially but awful for my physical and mental health.

[@AlwaysLoudAA]

This couldn’t have come at a better time. I’m 26, and milked the insurance benefits of my parents until the last possible moment. Now that I’m paying for my own insurance I started an HSA this year. I am putting in about $100 per paycheck and on top of company match I have about 1.6k invested and 1k that they make me hold in case I need it. Going to be contributing more as I earn more but it seems like a great resource to have!

[@jdenino6022]

Your lucky u could be on your parents policy till age 26. 😊

[@Natasha_4]

Question! If my Employer says they offer a 50% match that means if I request to have $500 added annually then I’d have $750 by the end of the year right?

[@Jewboyy]

@@Natasha_4 yes, sometimes they cap how much they contribute annually tho

[@JarradMorrow]

👍🏻

[@doggietreats67]

@@jdenino6022 everyone with parents who have insurance can be on their parents plan till the age of 26.

[@leoburgunder9201]

Started my HSA when it was originally created by Bill Clinton & Newt Gingrich as the MSA thru HSA Bank in Sheboygan, WI because they were the only firm at that time to link the bank account with a TD Ameritrade brokerage. I invested the max each year and had a HDHP with no lapse in coverage. I just turned 60 and have $160,000 invested in dividend stock with the portfolio earning $8k per year as we get close to retirement. It will fund Medicare premiums until I take SS at 70.

[@CookieMonstro21]

HSA benefits are amazing! Child day care FSA is the bees knees too! One thing I learned about it is to let your benefit accrue and then file after you’ve had $X amount spent to file for the claims.

[@JarradMorrow]

👍🏻

[@EdgarEstrada234]

I don’t understand the Child day care fsa hack. Can you expand?

[@MiguelRodriguez2010]

Great video! I’m an analyst for a healthcare brokerage. I’ve found that people that know how to use their HSA tend to love their HDHP coverage and the tax incentives!

[@barmanvarn]

A few things you didn’t touch on ( unless this has changed) is you can only move money between HSAa once a year without incurring fees. Also you might want to touch on strategies for keeping up with receipts for future reimbursements. Took me a while to assemble a plan that works well. I also advise when paying out of pocket to use a cash back card for even better savings.

[@JarradMorrow]

I moved money multiple times (at least 12 times in 2021) from Health Equity to Lively and Fidelity in 1 year without incurring any fees. I also mentioned in the video to pay with a cash back credit card when paying out of pocket. I broke down my receipt tracking process in this video: kzbin.info/www/bejne/qqPcc3Vtl5yEirM

[@barmanvarn]

@@JarradMorrow thanks! Must be based on financial institution. My last job had our HSA with a bank that didn’t allow any investing at all. I had to pay a fee to move money to another HSA so ended up doing a yearly transfer (which was free). Hated it. LOL

[@jaysant6958]

@@barmanvarn I think what you’re talking about is a rollover. That’s the one where you are only allowed to do once a year. Different than a transfer. Rollover is where the money goes to you directly in order for you to manually put it into a different HSA account within 60 days I think. The transfer one is where it’s directly transferred from one broker to another. That can be done unlimited times.

[@hoshaiYAH18]

Jarrad I just started following you and to say you are dope is an understatement. Your delivery is just slow enough for even me to understand, yet makes me feel smarter and all the more empowered for seeing your videos to the end. My Wife and I have compared our insurance policies and have found out that me moving to her policy makes sense. With that said I'm thinking to take what I have in my current HSA (under $10,000) and invest it. Maybe in a 2 fund portfolio (guess who I got that idea from lol). Keep in mind I'm 52 yrs old. While I know your not a fin advisor I'd love to get you thoughts. Keep up the amazing work as you are doing great work with solid videos and a voice of sound doctrine.

[@JarradMorrow]

I don't see any issue with investing that HSA money as long as you're able to afford all of your medical expenses on your wife's health insurance plan. Just make sure you're keeping track of all your medical expenses throughout the years (even if you're not enrolled in a HDHP) so you can cash out that HSA money tax free many years in the future. In case you haven't seen it yet, I lay out my receipt tracking process in this video kzbin.info/www/bejne/ipubfpV4jNirsLc

[@Jeff-gd8ev]

Jarrad makes a lot of good points, but I am not convinced that an HSA is that much of a no-brainer versus a Roth IRA. If HSAs have a "triple tax benefit", then Roth IRAs have a double-tax benefit - they grow tax-free, and distributions are tax-free. The difference then would be on the contribution side - Roth IRA contributions are not deductible. So if a couple maximized their HSA contribution and were in the 22% tax bracket, the HSA contribution would save them $1700 a year over a Roth IRA contribution. BUT, Roth IRAs have three benefits over an HSA - there's no requirement to have a HDHP (which itself can costs thousands per year in premiums), distributions are unrestricted (i.e. not limited to medical expenses), and fees are much lower or even zero in many cases vs. the fees associated with an HSA account.

[@diananguyen2904]

Having an HSA is a no-brainer. It’s like free money! And we’re all going to have healthcare expenses sooner or later.

[@JarradMorrow]

Very true! Although you’d be surprised how many people in the comments section of this video think they’re Superman and don’t believe they’re going to have any medical costs as they age 😂

[@pnic4540]

Paying for these expenses out of pocket completely negates the reason for having the HSA. I understand the reasoning, pay for the medical bills out of your HSA and replenish All while your balance in excess of your emergency HSA continues to be invested. Thanks for bringing HSAs up, I’m from OH and try to tell everyone about the tax advantages as well

[@samuelrojas2614]

Thank you for this amazing video! I just opened up an HSA and now I plan to max it out for next year

[@JarradMorrow]

Glad it was helpful!

[@liamsumnicht]

I want to shout about the financial benefits of HSAs from the mountain tops. I'm so thrilled you're doing it for me!

[@JarradMorrow]

Sounds like we both share the same love for an HSA 😂

[@liamsumnicht]

@@JarradMorrow Preach! I may have missed this in the video. Did you mention that distributions are tax free (at any age) up to the total amount of past unreimbursed medical expenses, as long as those expenses are recorded with your HSA provider? So one could build up their non-reimbursed expenses, and say, and be able to use up to that amount tax free, for any purpose, in retirement. Or, if any emergency comes up between now and then, one can have an emergency fund in their HSA worth up to the amount of unreimbursed medical expenses they've accumulated.

[@geraldwilson1504]

Hi Jared, I work for the Federal Government. Open season is November 12-December 14. We have HDHP as options. Thanks for the information.

[@JarradMorrow]

No problem 👍🏻

[@michaelkakaygeesick564]

Great videon something I do in addition to what you are saying: 1. Pay medical bills with a credit card, get reward points then pay off with your bank account. 2. If able, enable options on your account, once you get 100 shares of your investment you can write covered calls on your investments.

[@willburton2051]

Hi Jarrad, I was completely sold on HSAs until I learned that 100% of HSA balance that is inherited by a non spouse beneficiary (ie my kids one day) is taxable immediately in the year of inheritance. What are your thoughts on this?

[@JarradMorrow]

Doesn't concern me at all. An HSA is for YOU while YOU'RE alive so avoiding it just because your beneficiaries are going to have to pay taxes probably isn't the best way to look at it. If my beneficiaries want to bitch and moan about having to pay taxes on the buttloads of money I'm leaving them then I'll just donate it all to charity so no one will pay taxes and give them nothing 😂. Trust me, our heirs are going to be perfectly fine.

[@willburton2051]

Lol well that’s one way to approach it. Definitely still a home run when combined with other investment vehicles like traditional 401k/Roth, just something to consider for those planning for their kids future’s in mind. Love the content.

[@moeck14]

You can also use HSA funds to pay for previous medical expenses if you saved all your receipts. I don't know the time limitations linked to it but it will help ensure you consume it

[@zachadkins6161]

@@willburton2051 I definitely think about that. People could still benefit from a high deductible health plan with a HSA with lower premiums than a higher premium paying PPO plan. Especially when you find out that a lot of private practices file claims out of Network regardless of how platinum status your plan is. I don’t contribute to my HSA anymore but my company still does. I mainly use the HSA as a tool rather than a savings for the reason you have mentioned.

[@kf589]

@@moeck14 no time limits, currently

[@temizim]

Yep, started our HSA about 8 years ago. We now have approx $70,000 in the account now. Our goal is to have $250,000 in the account by the time we retire. TAX FREE

[@JarradMorrow]

👍🏻

[@kgal1298]

I've only had companies offer an HSA since 2018 so I still need to build up my accounts, but I am doing far better than I was in my 20's so I'm hoping I can find a few new incomes streams to build out the investment accounts I have outside my employer related ones.

[@JarradMorrow]

👍🏻

[@alexvasquez4697]

The one thing I got out of this, as a self-employed person, is that I wasn't taking advantage of paying into my HSA with pre-tax dollars. Next year I'll fix that. Good vid.

[@JarradMorrow]

Glad to hear it helped!

[@tylerbernard849]

Very helpful video! One quick question though: is it possible to only invest say half of the funds in your HSA to allow those to grow, then save the remainder of it to use for medical bills in the meantime? Or is it an all or nothing situation? Thanks again!

[@JarradMorrow]

Great question. Yes, you can only choose to invest a portion of your money and leave the rest available in "cash". It's not an all or nothing type of deal

[@waynemontgomery7369]

Yes, we don’t have the means to keep spare cash to pay for medical expenses, so at the end of the year we invest whatever HSA Money is left into index funds.

[@Sorchia56]

This popped up on my recommendations page. Thank you!!! I’m going to have my husband look at his as I was the one who insisted on an HSA. Then he was using it for everything that fell under the, as he says ‘ok’d items in the handbook’! 🤦‍♀️. I have all the HSA cards now. He thought the money was gone at the end of the year and we started all over again. I explained it to him in simpler terms. We can afford our prescriptions. Brilliant video. We use our credit card for the same reason. Win-win! Cheers

[@dakotaparsell9867]

Dave Ramsey's been teaching this for years. But has never taken the time to break it down in depth like this.

[@JarradMorrow]

👍🏻

[@LeftBrainedArtist]

Utah is so high becuse one of the largest HSA companies in the nation, HealthEquity, is located in the Salt Lake Valley area and many of the big silicone slopes companies utilize their services.

[@eak3425]

You missed another key tactic for using an HSA. If you pay medical bills out of pocket, keep a picture of ALL receipts for everything you have paid. At any point in time you can reimburse yourself from your HSA. For instance, let's say you paid $30K of medical bills out of pocket over the past 15 years. You can transfer $30K from your HSA (which has been growing tax deferred) to your bank account at any point in time later in life (if you have a the documentation of the medical bills). So make a google drive folder immediately and just take pictures each year of medical expenses you pay out of pocket for documentation

[@JarradMorrow]

Good callout. I showed my process for doing this in the video I linked up at the end of this one 👍🏻

[@DomParenti]

Im struggling to understand how the end results of this are a sure fire way to be more beneficial. I have more money...good, but to do what with? The HSA as we established is only good for paying for medical expenses- okay. Im being told to invest the money ive been putting away tax free to grow the account- okay. Im told to use out of pocket money for medical expenses instead of the tax free money to keep growing my investment of tax free money over the long term- okay, I guess(but i may not use it). So in 30 years I have a large savings account of money that still can only be used for medical expenses to which I have no idea if I will have large or small medical expenses that I will even use it. And if im not using it then ive been paying double the amount to obtain this money by investing into the account and paying out of pocket? Is that just supposed to be the 'risk' involved or what am I missing that this makes sense once youve aged 30 more years and been paying for medical expenses twice over once from taxed money and once from pre tax money?

[@sonya5568]

I’ve had my HSA for quite some time and just increased it to more out of my check beginning Jan 1. This came right on time. Learned about things I could purchase on Amazon with my hsa as well which was nice to learn as it wasn’t really advertised.

[@JarradMorrow]

Nice job increasing the amount you're contributing 👍🏻. Keep up the good work!

[@b.freeman2118]

What could you purchase from Amazon on related to HSA ?

[@jdthompson5778]

My HSA contributions were auto deducted by my employer and had NO taxes withdrawn .. not even FICA (SS & Medicare)! People forget this but it’s over 7.5% of your check. Pre-tax 401k deductions do get the FICA taxes withdrawn! Of course you also don’t get credit for HSA contributions as SS Income. However in the long run for most this will be a nice plus! It’s truly THE best investment you can make! One other thing… you can use after age 65 to pay for Medicare premiums tax and penalty free. I believe LTC insurance premiums is another allowed tax-free use.

[@JarradMorrow]

Thanks for sharing your thoughts. Here's mine: Long term care insurance is trash. Stick with term life insurance if you need it 👍🏻😂

[@mitchellpate4882]

You left out one of the biggest advantages with long-game HSAs. If you save the receipts for all those medical bills paid out of pocket you can cash them in at any point, tax free and penalty free. This lets you treat your HSA as a secondary emergency fund earlier in life and a slush fund to pay for splurges once its growth has become self sustaining.

[@JarradMorrow]

Sounds like you didn’t watch until the end because I did mention the receipts 😂

[@nelliehuba114]

I work with a brokers office and have been educating people of the benefits of HSAs for years!! Not many people want to have that HDHP but if you can budget for your emergency fund and medical expenses, it makes sense. Last year, I had an HDHP and HSA with UHC/Optum. They give you a super simple option to invest directly with Betterment. I had no idea I could move to another account if I didn't like the fees. Interesting! This year it made more sense for me to have a PPO but I still have a large chunk in that HSA that I will be investing!!!! Thanks for your videos I will refer to them and share with colleagues.

[@CLL-sz7dv]

Can you apply these concepts to investing in an HSA post-taxes? I do not have an HSA available through my employer, but opened one that I'm contributing to after payroll taxes.

[@JarradMorrow]

Yes you can! I mention this in the video, but if you have to contribute on your own then you will get a federal tax deduction when you file your taxes for the year. But you will not get a tax deduction for SSI and medicare like you would be able to if your employer was contributing from your paycheck. With just the federal tax savings an HSA is still beneficial so it's not necessarily a deal breaker.

[@ps2050]

17:30 honesty+transparency by Jarrad.. i knew about this so i was waiting to see if Jarrad covers this and he did. Kudos for that. This is super important as you can see Jarrad highlighting with a big red warning sign! So pay attention and understand this.

[@shephudson1383]

I maxxed mine for a few years and 100% invested in SP500. I switched companies and no longer have a HDHP. I can't use it now for medical expenses but I've always considered it a retirement account.

[@JarradMorrow]

You can still use the money for medical expenses whenever you want even though you're not enrolled in a HDHP! The only time being enrolled in an HDHP matters is when you're contributing money to the account. After that you can use it whenever.

[@shephudson1383]

@@JarradMorrow I did not know that. I have no intentions of using it , but it's good to know that's an option.

[@JarradMorrow]

Yep. So make sure you're keeping track of all your receipts because if the money you have invested grows to 5x (making up a number) then you can cash in all those medical receipts from over the years to pull out the money tax free at any point in time in the future. Not sure if you've seen the video, but I break down my receipt tracking process in this one kzbin.info/www/bejne/ipubfpV4jNirsLc I start talking about my process around 7

[@jagannathdas5491]

How can you take out the money sometime in future if the receipts were years old. Eg. I am withdrawing today1k of my expenses made 4 years ago?

[@JarradMorrow]

There is no time limit on when you can cash in receipts to pull money from your HSA. This is why in the video I gave the example of paying for medical expenses out of pocket so the $ in your HSA can stay invested to grow beyond the original amount. Then later down the line withdrawing money for that expense in the past.

[@growingwiththewades8093]

So to invest $7,750 a year into your HSA for family coverage that’s over $600 a month, and with paying over $400 a month for health insurance and any medical bills the expensive health insurance doesn’t cost, along with investing your Roth IRA monthly contribution of $200, with the 401k investing and then stocks/bonds investment accounts, with living expenses, etc each month, what’s leftover, if anything? This is all just so frustrating to me. I feel like I’m being played living this game we call life

[@cincuenteando]

Meanwhile, some people get free cell phones, housing, food, money, travel expenses, medical services and more, just for crossing the border undocumented.

[@tinacherian4816]

I have open enrollment deadline this Friday and have been going back and forth if I should do HSA because I’m not looking forward to higher medical bills in the mail. But this video helped me decide to go for the HSA, the tax benefit with investment returns seems like a no brainer benefit to me in the long run. Thank you!

[@JarradMorrow]

Glad to hear it was helpful! The good news is that next enrollment period you can switch back if you realize an HDHP/HSA doesn't work for your particular situation. Even a 1 year contribution of $3,850 invested for 30 years at a 7% annual return would turn into $29k. Think of this next year as a "test run" then re-evaluate. Do this every year and if life circumstances change then don't hesitate to ditch the HDHP.

[@adamb7230]

In my experience the medical bills are much less painful when you have money in your HSA to pay for them rather than out of pocket.

[@JarradMorrow]

Do what works best for you 👍🏻

[@mundie33]

Companies and insurers are now pricing them almost on parity (when you factor in company matches) so there’s very few situations where the cheaper premium plan is worth it. Maybe 4-7% of the population

[@tinacherian4816]

Exactly. When I was comparing the numbers they almost looked the same so it was making it hard to decide especially not knowing what the higher deductible will look like until I start going for my checkups, lab test, etc and see the bills in the mail. This year will be a test run.

[@thehiddenexperience4116]

California residents: Don't sell any positions or you'll be taxed by state. Also, not tax deferred for the state...

[@juanjon915]

I’ve been doing it wrong this whole time , gonna start using this method

[@JarradMorrow]

👍🏻

[@matthewjohnson3505]

posted just in time for benefit enrollment!! right on the ball!!

[@JarradMorrow]

Yes sir. Working in corporate america for many years made me realize the time of year I need to release this video for the highest impact and benefit to viewers 👍🏻

[@brianjp18]

So worst case scenario once you are 65 is this account is essential the equivalent of a traditional/401k if you were to use the money for non medical?

[@JarradMorrow]

Yes, exactly. I mentioned this towards the end of the video 👍🏻

[@yrysbekovanargiz36]

Wow, amazing content. Definitely cleared out my understanding about HSA. From now on definitely going to take advantage of my HSA. Thank you

[@raypena1516]

I used my HSA account to pay for dental , medical and vision care. Money I will not be tax on but I use the money to pay for medical bills. A very smart program .

[@JarradMorrow]

👍🏻

[@magentatrifoil]

This video was great. I would add one critique. Assuming that most people don’t understand health insurance and for that matter health investment accounts. It would’ve been great to include a little bit about how the insurance side works. I think the biggest fear most people have with choosing a high deductible option is that they will spend so much more on healthcare. Fundamentally it’s just a misunderstanding of what premiums, co-pays, coinsurance, and deductibles are.

[@JarradMorrow]

Thanks for sharing your opinion 👍🏻

[@mirnasandoval7527]

Great information Jarrad. I'm the investor type contributing the max every year and just leave it to grow.

[@JarradMorrow]

So smart! Just make sure you're tracking all of your medical receipts throughout the years so you can cash out that HSA money tax free in the future 👍🏻

[@mirnasandoval7527]

@@JarradMorrow thank you. My goal is not to touch it paying my medical expenses outside HSA. I want it grow and be able to use it after retirement

[@MatthewStidham]

That was really great advice! One more thing that I plan on is if I'm like most of my family and I live into my 90s I will eventually need long term care. I plan on using my HSA for my long term care expenses when I am near the end of life, which given how I am maxing out my HSA will probably be enough to cover the full cost. Long term care (at this point in time) is one of the few health expenses not covered by Medicare, and long term care insurance generally lasts only a few years. My HSA will mean that if my long term care insurance runs out, which I will probably buy someday, I hopefully will be able to pay for the rest of the cost through my HSA, before touching my Roth IRA. The longer you go without withdrawing, the bigger the benefit you will have.

[@ImTheBatchMan]

I'm proud to have been part of the 6% since I got my first salaried job at age 25. My wife and I are both on VA healthcare, so most emergencies (hospitals, specialists, medicine, etc) are free for us. We keep cash as part of our emergency fund to cover the deductible if it ever comes up. We're planning on maxing this out during our working years and letting it grow until we need it for end of life care and to cover the gaps during retirement.

[@als2cents679]

You missed what I think is the biggest benefit of an HSA. The law allows you to pay from your pocket and then take a qualified distribution from an HSA to refund that medical expense, but the law does not require you to remove the money from the HSA in the same year as the expense was incurred. So, if you keep your receipts, then after 30 years of growth, you can simply withdraw all your medical expenses over those 30 years from your HSA as a qualified distribution.

[@jonathanveit2506]

Thank you for the great videos! I was wondering how it works if your employer offers two insurance plans, but both can be considered high deductible under the IRS criteria you listed. For example "regular plan" has 2000 deductable and 5500 OoPM. While the one listed as "HSA plan" has 3000 deductable and 5000 OoPM. Both qualify for the IRS minimums for being a HDHP.

[@JarradMorrow]

I'd personally stick with the one listed as an "HSA plan" just to be safe, but it could be worth doing the extra work to verify that the other plan works as well

[@hannahbaker9230]

This video is super helpful. Thanks so much! Signed, almost 26 year old!

[@JarradMorrow]

Glad it helped!

[@kchal0]

I'm currently 29, and had some investments in my roth ira and HSA accounts that did really well. Now currently worth 7 figures and my hsa has 6 figures in it. Its been a big blessing especially when my son was born because hospital fees were not cheap.

[@reynolds619]

How much TSLA you holding lol

[@JarradMorrow]

👍🏻

[@kchal0]

@@reynolds619 none lol I’ve actually never owned it. I did however own a large position on GME before Reddit discovered it and sold it near the peak. So I got lucky. Now adays I’m just in index funds.

[@reynolds619]

@@kchal0 congrats that is awesome

[@dwalker6868]

Lovely you answered a big question for me. What a relief.

[@JarradMorrow]

Glad it was helpful!

[@brokegirlinvesting]

Are you able to invest in the HSA accounts that are offered by any employers? Or is it just some HSA accounts like Fidelity that allow you to invest your HSA money?

[@JarradMorrow]

Investing should be available in all HSAs

[@phillipsusi1791]

My employer's one has some investment funds you can put the money into, but you have to keep at least $1000 cash or they charge you $5 a month for the investment account. And of course, the funds themselves charge feeds that reduce their earnings.

[@_Renee2]

Glad I came across your account! Just started one for the new year.

[@JarradMorrow]

Happy to hear the video helped! If you have any more questions then don't hesitate to ask.

[@Retiredmco]

Jarrad I'm doing EXACTLY what you are doing. Max it out every year plus 55 age catch up. Then invest it in a fidelity S & P 500 index fund. Won't need to touch it.

[@redcarpetfly]

I thought HSA accounts didn't roll over and that the had to be used by the end of the year? Maybe I missed something or misunderstood something. And how do you roll your HSA account to an investment account, and not get dinged for not using the money for health care? I think I might need a slower explanation because I think I'm missing some important steps. LOL. I use to have an HSA account but I never ended up using the money in the acct and the medical supplies I tried to buy weren't approved, so I would end up losing the money. So, I don't choose HSA accts. But this interesting. Thanks for sharing!

[@JarradMorrow]

Funds not being able to roll over from year to year has to do with an FSA. An HSA is completely different. A lot of people mix up the two so this is why I specifically called that out within the first 2 minutes of the video.

[@tableround3019]

The HSA bank has investment options - you never ever touch that money outside the HSA bank account until withdrawing for medical costs.

[@redcarpetfly]

@@tableround3019 Thank you for clarifying! :)

[@redcarpetfly]

@@JarradMorrow oooooohhhhh! So, I was confused from the very start. I thought I had a HSA account but it really was a FSA. Geez, this is very confusing. Thanks for posting this helpful video and thanks for responding. 🙂

[@LoveClassicMusic0205]

@@JarradMorrow So why would anyone invest in an FSA when HSA is available? I was confused between the two until my employer offered an HSA. The office manager explained to me that it was exempt from income, social security, and medicare taxes, and could be carried over from year to year. I had never heard of HSA before and only knew of FSA, which I thought was a ripoff.

[@Space_Trucker]

The ability to open an HSA with a better company while retaining the employer-required account is something I'd never realized was possible! I sincerely dislike the company my employer is using, their online system is constantly broken and I still can't get a checking account connected for any kind of reimbursements. This is after several months of trying with support. Basic stuff they can't even handle. They also charge tons of fees that have gone up this year. I am looking into both Lively and Fidelity from here - thank you so much for this information!

[@JarradMorrow]

Thanks for sharing your experience. Mind mentioning which HSA provider you’re describing so people can make sure to avoid them?

[@Space_Trucker]

@@JarradMorrow Yes! OptumBank

[@JarradMorrow]

I’ll make sure to share this info when I make another HSA video 👍🏻

[@Space_Trucker]

@@JarradMorrow Thanks Jarrad, a rockstar as usual! 😁

[@kimallnaturelle]

I work in government and am unsure this is an option for me

[@mikemush9741]

Excellent video Jarrad! Thanks for putting it together. My wife and I maxed out our 401k contributions last year and was still pissed off to find out we still owed $7,000 at the end of the year! That got me to look for more tax savings and on to HSA's. I had set up my HSA for strictly medical expenses, but after watching your video, I understand much more clearly what you are saying about paying out of pocket for expenses, while letting your money grow in the HSA. My question is....I'm not quite maxing out my HSA. Can I adjust my contributions at any time or only during open enrollment? I'd really like to get on maxing this out this year. Also, I only contributed $2,000 in 2022. Can I contribute up to the max for 2022 even though we are now in 2023? Thanks so much!!!

[@mikemush9741]

Oh also, I liked and subscribed!

[@jakesouth2]

I just opened an HSA and they allow me to change the contribution at anytime.

[@deskubrir]

You can contribute to 2022 year until mid-April.2023. When I started in the HSA program for 2022, in March.2022 I went to my HSA account and deposited the max for the 2021 year (the HSA account asks what year you are contributing for). Since I did my 2021 taxes after that move, I also saved a ton in taxes.

[@martycarmichael3885]

HSA’s are great! I started about 8 years ago and now have $80k after making some good investments. It’s like another 401k. I hope to retire in 3-4 years and use it to pay a lot of my retirement medical bills. My wife and I are healthy so I’m going to not spend any and let it grow! I have great company insurance and it will carry on until I’m 65 and go on Medicare.

[@WarMachineeTTV]

I dont have health insurance, can i still contribute to a HSA or im not allowed to at all? If i cannot is there a way to by pass and get a high deductible to contibute to an HSA?

[@JarradMorrow]

I mentioned it many times that you cannot get around the HDHP part of an HSA

[@parkour267]

If you buy your own health insurance you can buy one within the HDHP limmits I would think. And your premium would be less expensive as well.

[@johnmarlowe914]

I like to think of HSAs as having QUAD tax savings, rather than TRIPLE tax savings. For the 70%+ of incomes below 147k per year, HSA contributions are also not taxed for FICA (social security), so isn't taxed the 7.65% that would go to that. I'll admit that these SS contributions theoretically reduce your payments from SS, but being young I'm not expecting much from SS anyway and the calculation is likely to change in the next 30+ years. Since I'm saving through my HSA, I'm confident that I'll have less of a need for it anyway.

[@brianruff1133]

I'm glad you mentioned near the end of the video the use of a cc to pay your medical expenses. I do this for the cc sign up bonuses. Just pay it off before you pay any interest! Also, check the list of what is an allowable medical expense, it's more than you might think. Good info 👍

[@JarradMorrow]

Great points. Thanks for sharing the additional commentary 👍🏻

[@BaeRomano]

The thing is tho my PPO is great. I pay $80 a month for a premium and get 90% coverage and a deductible of 500. Max out of pocket is 1000. Is HSA still worth it here?

[@jasbur76]

I've never been willing to choose the worst health insurance plan my employer offers, so I can't get an HSA.

[@JarradMorrow]

Happy to hear you properly compared different health insurance options to pick one that works best for your lifestyle! Keep up the good work 😃👍🏻

[@phillipsusi1791]

As an individual, my employer's plan is essentially free either way so I didn't think it made much sense to go with the high deductible option, but it's a lot more to cover the family. With the money saved going for the high deductible plan, I can just put that into the HSA and even if I end up hitting the maximum out of pocket limit on health care for the year, I'm still better off. If I don't, then better yet.