- "HSAs offer a triple tax advantage," says Bert M. Halliday, a first vice president and senior adviser at Merrill Lynch & Co., who leads a team of financial advisers specializing in these accounts.
- Money in the accounts can be invested in stocks, bonds, mutual funds and certificates of deposit. Merrill is managing about 20,000 HSAs for clients, mainly doctors, lawyers and accountants, says Mr. Halliday.
- "It's a great perk" for people approaching retirement, says Betsy Billard, a private wealth adviser with Ameriprise Financial Inc.
- Maxing out on annual contributions to an HSA can be an astute financial strategy for the well-heeled who can afford to cover any out-of-pocket medical expenses without dipping into their HSA.
- However, HSAs are less favorable for lower-income unhealthy people because out-of-pocket expenses increase with the amount of health-care services you use, and the tax advantages aren't as great for people in lower brackets. In this scenario, paying more up-front in premiums is likely to be a more cost-effective option.
It seems more like the HSAs were geared to those in higher income and the current participation seems to reflect that demographic. As HSAs are the focus of many of the Republician presidental candidates as a way of addressing our healthcare crisis, the question is is this the right plan?