Higher Health-Plan Deductibles Open Door to Health Savings Accounts

Health savings accounts have been slow to catch on, with good reason: To qualify, you must enroll in a high-deductible health insurance plan. For 2013, that means a deductible of at least $1,250 for individual coverage or $2,500 for a family.

Soon, though, you may not have another choice. Among large and midsize com­panies, 10% now offer a high-deductible plan as their only option, and 44% are considering moving in that direction in the next three to five years, reports a survey by Aon Hewitt, a human resources consultant.

Employers are turning to these plans in an effort to cut costs, says Aon Hewitt’s Maureen Fay. And if you’re healthy, they can be cheaper for you, too, because premiums are often lower than those for traditional plans. But if you need medical care, you could be hit with steep out-of-pocket costs.

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An HSA allows you to make pretax contributions to a fund designated for those expenses. The money grows tax-deferred, and qualified withdrawals are tax-free. Plus, you can sock away a bundle. In 2013, you can stash up to $3,250 for individual coverage or up to $6,450 for family coverage. If you’re 55 or older, you can contribute an additional $1,000. That’s a lot higher than the $2,500 limit on contributions to a medical flexible spending account. And many employers will kick in to your HSA or match contributions.

As is the case with an FSA, you can use money in your HSA for deductibles, co-payments and other expenses not covered by insurance. But unlike with flex accounts, you don’t have to spend all the money by year-end. You may leave the money in your account until you need it, and take it with you if you change jobs.