Health Savings Accounts (HSAs) are basically the hot new(ish) accessory in the benefits world these days. We are here to sing the praises of HSAs in five parts:
You keep your funds forever
We did a quick Q&A with Squints from The Sandlot about HSAs:
BRI: So, Squints, how long do you get to keep your HSA funds?
Squints: For-Ev-Ver! For-Ev-Ver!
And there you have it, directly from a fictional baseball-playing kid from a ’90s cult classic film: our first reason for loving HSAs.
The funds you contribute to your HSA are yours to keep year over year through your tenure as an employee. You also get to keep them into retirement and if you switch employers. No matter where you are in your career, or in life, your Health Savings Account will be your constant companion.
You can nurture your funds
In 2019, the houseplant craze hit and while some of you may have been enjoying your gardens before it was trendy, we’re still impressed with how many plant aficionados there are out there. On the other hand, if you’re anything like us, the minute you look in a plant’s direction, it dies and this whole plant growing craze is just something you watch from the sidelines, twiddling your decidedly not-green thumbs.
Not anymore – grow your HSA funds instead! No fighting temperature changes or sunlight levels or forgetting to water – decide on an investment strategy and watch your funds grow over time.
You can use the funds as you see fit
We talked previously about how HSAs and 401(k)s pair nicely together. They have similar functionality, with HSAs having an extra degree of flexibility in accessing the funds when it comes to eligible expenses.
For those of us in the early stages of our careers, thoughts of retirement often consist of “I wish I was retiring soon so I can take a nap whenever I want and travel everywhere.” While our retirement plans are slightly more developed, we can’t wait to hit 65 candles on our birthday cakes so we can use all the HSA funds that we’ve invested and grown to do some of that traveling.
(Okay so we won’t be primarily using our HSA as our travel funds since we aren’t keen on paying income tax on it… but in a pinch, it’s nice to know that’s a possibility!)
Skip the substantiation
With FSAs and HRAs, claims need to be substantiated by the plan administrator. This means submitting supporting documentation within a specific time frame with consequences, such as deactivation of your debit card, if this process isn’t completed on time according to IRS rules and regulations.
HSA expenses still need to be eligible, however HSAs are a self-substantiation process. Self-Substantiation is basically adhering to the Honor Code. You use HSA funds for eligible expenses and don’t have to provide proof unless you’re audited. So while it’s still a good idea to keep your itemized receipts, you can keep them filed away “out of sight, out of mind.”
BRI Life Hack: To avoid the dreaded shoebox full of old, faded receipts take pictures of your receipts using your smartphone! There are receipt specific apps, such as Expensify, which have great tools to keep you organized. We’re also big fans of Adobe Scan as a general document scanner. Just scan and send to your computer and file those digitally preserved receipts away for three years!
Earn bragging rights
Have you ever asked your groups of friends if they have an HSA? Go ahead and try it.
We’re guessing their response was something along the lines of “Yes I have an HSA! I love it!” before launching into a tirade about how their HSA is the best thing since sliced bread.*
*This reaction is a (semi) fictional dramatization based on real events that definitely happened in a group chat not long ago.
There are over 29 million Health Savings Accounts as of July 2020, according to this study by Devenir. If this report is anything to go by, the increasing popularity of HSAs isn’t slowing down any time soon (probably for all the reasons we just listed as why we also love HSAs).
Consider joining us so you can also shout your love for your HSA from the rooftops!