Philadelphia Reflections

The musings of a physician who has served the community for over six decades

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HSA specifics

Health Savings Accounts (HSA)

HSAs allow you to set aside money on a pre-tax basis to pay for qualified medical expenses. By using untaxed dollars in a Health Savings Account (HSA) to pay for deductibles, copayments, coinsurance, and some other expenses, you may be able to lower your overall health care costs. HSA funds generally may not be used to pay premiums.

You may contribute to an HSA only if you have a High Deductible Health Plan (HDHP). For 2020, if you have an HDHP, you can contribute up to $3,550 for self-only coverage and up to $7,100 for family coverage into an HSA. HSA funds roll over year to year if you don't spend them.

High Deductible Health Plan (HDHP)

For 2020, the IRS defines a high deductible health plan as any plan with a deductible of at least $1,400 for an individual or $2,800 for a family. An HDHP's total yearly out-of-pocket expenses (including deductibles, copayments, and coinsurance) can't be more than $6,900 for an individual or $13,800 for a family. (This limit doesn't apply to out-of-network services.)

Premium $1,500/mo $3,000/mo
Deductible $3,000/yr $1,500/yr

HDHPs are appropriate for people who do not expect to have large medical expenses; these people will benefit from the lower premiums. People with large anticipated medical expenses may be better off with an insurance plan that charges higher premiums but covers a greater percentage of their costs.

You can apply for a HDHP on I tried this myself to get data on specific plans but I was blocked because I am on Medicare.

Fidelity HSA accounts

Individuals may open their own no-fee HSA accounts at Fidelity at Individuals may open their own HSA at any time and can contribute whenever they want to. It costs nothing to establish your own individual HSA account at Fidelity; there are no ongoing account fees except for the fees charged by the funds you invest in (see the "net expense ratios" in next paragraph for details).

Once a HSA is established, you can invest in a list of funds. See List of Fidelity HSA funds to invest in.

Employers can establish HSA plans for their employees through Fidelity at The primary reason to do this is to allow the employer to match employee contributions but employees can only join an employer's HSA during pre-defined enrollment periods. [1]

[1] For Ross & Perry, encouraging the employees to get their own individual HSAs would seem to be the better option because of the expense and administrative effort that would be incurred in establishing and maintaining a company plan unless there is a strong desire to provide matching funds (which assumes the employees are committed to joining the plan, getting and paying for the high-deductible insurance, and making ongoing contributions into their HSAs).

Originally published: Tuesday, November 12, 2019; most-recently modified: Tuesday, November 12, 2019