Health Savings Account - HSA - Case Study

HSA's can offer both short and long term financial benefits. Here is an example of a married couple, both 35 years of age, with two dependents, that live in the 80004 zip code. Over the course of a year they have a $1,500 medical claim and $575 in uncovered dental and vision expenses.

This example compares a leading copay plan against a HSA plan:

For the first year they have $5,650 in the HSA available to use for doctor visits, prescriptions, hospitalization, vision, dental, etc. If something serious happens the insurance plan pays for all covered costs after the $5,650 deductible. The balance in the HSA can earn interest or can generate income if invested in stocks, bonds or mutual funds. Get a free quote on a HSA Qualified Health Insurance Plan

HSA’s can offer longer-term benefits as well, even in situations with higher expenses than in the example above. Let’s see what could happen if the family had qualified medical expenses of $2,500 every year and they fund the HSA to the maximum $5,650 allowable each year and earn 3% interest annually on their HSA balance.

After 5 years the family could save over $7,000 in taxes while watching their Health Savings Account balance grow to $11,850. By the time they reach age 65 their HSA balance could grow to over $135,000. If they spent only 25% of their savings annually their HSA balance could have grown to over $200,000 when they reach age 65.

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MORE HSA LEARNING RESOURCES >
HSA OVERVIEW
HSA QUALIFIED HEALTH PLANS
HSA BANKING OPTIONS
HSA MULTIMEDIA TUTORIAL
HSA QUALIFIED EXPENSES
HSA QUESTIONS AND ANSWERS
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Interest rates are subject to change and your experience may vary.  HSA’s are not a pension or retirement plan and should not be used in lieu of a qualified pension or retirement plan.  The information provided in this article and case study is not tax or legal advice, which should only be sought from a qualified professional advisor.  

Colorado Health Insurance Brokers are not engaged in rendering tax, investment or legal advice. Federal and state regulations are subject to change. If tax, investment or legal advice is required, seek the services of a licensed professional. All terms and conditions of insurance coverage, including benefits and exclusions, are contained in the Certificate, which shall control in the event of a conflict with this overview.

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