top of page

History of the Health Savings Account

​

Health Savings Accounts (HSAs) were created in 2003 so that individuals covered by high-deductible health plans could receive tax-preferred treatment of money saved for medical expenses.  Generally, an adult who is covered by a high-deductible health plan (and has no other first-dollar coverage) may establish an HSA.

​

By in large, they are a good service that allow people to use their pre-tax dollars to contribute in advance to medical savings account that could be used on certain* medical expense.  As good as an HSA is however, it is limited to what "type" of medical procedures it can be used for (for example cosmetic surgery is generally not covered) and the claims process can be a bit burdensome with claims paperwork and waiting periods for funds to be re-reimbursed.

​

In addition, even though there is a tax savings associated with an HSA, it pales in comparison to an HMA account due to the aggressive contribution match.  Here is a side by side comparison of an HSA account vs an HMA account:

hsavshma.PNG

Assumptions:

​

  • $140 per month HSA (Health Savings Account) / HMA account contribution over 35 months

  • 25% Personal Income Tax Bracket

  • Net cost of HSA includes 25% tax deduction

  • A $3,600 claim is paid from the HSA or HMA account balance in month 35 (No prior medical expenses paid for)

bottom of page