The Obamacare Effect: Why HSAs Are More Popular Than Ever

The Obamacare Effect: Why HSAs Are More Popular Than Ever

Obamacare has placed many Americans in a pickle.

On one hand, their health insurance plans generally boast lower premiums—but they can also have sky-high deductibles. In some cases, the deductible may be so hefty that they never even meet it.


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If that scenario sounds familiar, don't fret—there are ways to lower your burden.

One of the most common wallet-friendly solutions is to open a health savings account (HSA)—a tax-advantaged medical savings account that’s only available to people enrolled in a high-deductible health plan (HDHP).

You don’t pay taxes on withdrawals from an HSA, as long as you’re using the funds to cover qualified medical expenses.

Perhaps unsurprisingly, the number of HSA accounts has grown tremendously since the passage of Obamacare. According to one report, between mid-2013 and mid-2014, the number of HSA accounts increased 29% to 11.8 million, and HSA assets increased 26% to more than $22.8 billion.

Wondering if those new account holders are onto something—and whether an HSA might be appropriate for you?

For starters, make sure you have a qualifying HDHP, and no other health coverage. For 2015, that means your policy's deductible is at least $1,300 for self-only coverage or $2,600 for family coverage.

It's also worth considering your current medical status. If you're generally healthy and expect that you'll be able to cover your medical bills out-of-pocket this year, an HSA may be a good bet.

If you fit the bill, you can still take advantage of this savings opportunity—as you have until April 2015 to open and contribute to an HSA for the previous tax year. Then you can claim your deduction on your 2014 Form 1040.

HSAs are 100% tax-deductible, as long as you don't surpass the contribution limits. For 2015, that’s $3,350 for individuals and $6,650 for families. For 2014, the limits are $3,300 and $6,550.

If you’re looking for other ways to slash medical bills—even beyond opening a savings account—check out these eight easy ways to save big on health and wellness costs.


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