Read the full article
The share of workers enrolled in a high-deductible health plan increased substantially last year, according to new research from the State Health Access Data Assistance Center at the University of Minnesota.
About 56% of people with employer-sponsored coverage had high-deductible plans in 2021. That’s 5.3 percentage points more than in 2020.
Few people like paying significant sums out of pocket for healthcare. And that’s just what high-deductible plans tend to require.
But they’re actually in the financial interests of many Americans — especially when paired with a tax-advantaged health savings account, or HSA.
People must have a high-deductible plan if they wish to contribute to an HSA.
The minimum deductible for such a plan is $1,400 for an individual or $2,800 for a family.
Out-of-pocket expenses — including deductibles, copayments, and coinsurance — can’t exceed $7,050 for an individual or $14,100 for a family.
Those potential out-of-pocket expenses come with significant tax benefits, if people take advantage of what HSAs can do.
Money is tax-free going in, grows tax-free within the account, and is tax-free going out, as long as it covers medical expenses.
This year, individuals can save up to $3,650 in an HSA for healthcare expenses. Families can put away up to $7,300. The triple tax advantage HSAs offer can amount to thousands of dollars in value each year.
Indeed, the tax savings alone can beat the return a person can get on cash, bonds, and all but the highest-flying stocks.
Workers Want Greater Control of Their Healthcare Dollars
Sally C. Pipes
Read the full article
The share of workers enrolled in a high-deductible health plan increased substantially last year, according to new research from the State Health Access Data Assistance Center at the University of Minnesota.
About 56% of people with employer-sponsored coverage had high-deductible plans in 2021. That’s 5.3 percentage points more than in 2020.
Few people like paying significant sums out of pocket for healthcare. And that’s just what high-deductible plans tend to require.
But they’re actually in the financial interests of many Americans — especially when paired with a tax-advantaged health savings account, or HSA.
People must have a high-deductible plan if they wish to contribute to an HSA.
The minimum deductible for such a plan is $1,400 for an individual or $2,800 for a family.
Out-of-pocket expenses — including deductibles, copayments, and coinsurance — can’t exceed $7,050 for an individual or $14,100 for a family.
Those potential out-of-pocket expenses come with significant tax benefits, if people take advantage of what HSAs can do.
Money is tax-free going in, grows tax-free within the account, and is tax-free going out, as long as it covers medical expenses.
This year, individuals can save up to $3,650 in an HSA for healthcare expenses. Families can put away up to $7,300. The triple tax advantage HSAs offer can amount to thousands of dollars in value each year.
Indeed, the tax savings alone can beat the return a person can get on cash, bonds, and all but the highest-flying stocks.
Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.