Chances are at some point during the year you or a family member will have out-of-pocket health care costs and the chances are those costs will be modest. Nevertheless, it’s good to be prepared.
If you are enrolled in a qualified high deductible health plan (see requirements below) which actually has relatively modest deductibles, you should be using a HSA, you don’t need an employer plan, you can open one on your own. As you can see, millions of Americans have already done so.
There are significant tax benefits immediately and in the future, even into retirement. Here are the rules.
Health savings accounts continue surging on all fronts. The number of accounts grew 13% over the past year to top 25 million while assets grew 19% to $53.8 billion, according to research firm Devenir.
Looking further, Devenir projects the number of HSAs to hit 30 million by 2020, with $75 billion in total assets and $16.7 billion in investment assets. Source: https://www.benefitnews.com/news/number-of-hsa-expected-to-continue
“High deductible health plan. For calendar year 2019, a “high deductible health plan” is defined under § 223(c)(2)(A) as a health plan with an annual deductible that is not less than $1,350 for self-only coverage or $2,700 for family coverage, and the annual out-of-pocket expenses (deductibles, co-payments, and other amounts, but not premiums) do not exceed $6,750 for self-only coverage or $13,500 for family coverage.” Source: https://www.irs.gov/pub/irs-drop/rp-18-30.pdf
But a word of advice …
even if you do not have a HDHP, it is prudent to set aside a modest fund to cover out-of-pocket costs, even $500 can ease the stress of unexpected office visits or prescription Co-pay.