HSA’s help employers and employees reduce healthcare costs when paired with a qualified high-deductible plan (HDHP). This is the most powerful pre-tax investment vehicle, offering 7.65% greater savings than a 401(k) at time of deposit and the ability to be taxed as ordinary income after age 65 upon withdrawal. Most people use them as a spending account, but investments are on the rise!
A portable individual-owned bank account that allows pre-tax contributions, tax free interest, and tax free withdrawals for qualified expenses.
Employee enrolls in HDHP and an HSA. Employee, employer, or both contribute money, which is placed in a custodial account. Employee spends money on qualified expenses and grows the account balance, which they can invest and use later.