No. of Recommendations: 4
Like a 401k, it only works if you have the discretionary money to put into it.
Exactly. I have an HSA and it's worked well for me, but only because I:
a) was fortunate enough to be in a position to set money aside, and
b) was fortunate enough to be and remain in good health for some years while I was accumulating money and not have any big medical expenses come up (to contribute to an HSA, you must be on high deductible health insurance, so it only works if you're not having big expenses). It's a gamble--you have to choose your high deductible insurance without necessarily knowing what expenses are going to come up in the next year, and when.
But for many (and maybe most) people, they don't meet one or both of the above criteria, and it's not a good option for them. I was benefits administrator at my workplaces and helped a lot of people over the years choose their insurance each year, and the high deductible/HSA option didn't work well for most people that I saw. Flexible Spending accounts were much more popular because once you committed to the amount, you could access the money at any time during the year, and didn't have to wait until the money had actually been put into your account (like you do with an HSA).
So...they tend to work well for the well to do, not so much for the not well to do. Anyone surprised that Trump is pushing them?
