--- title: 4 Things You Should Know About Health Savings Accounts description: Health savings accounts, which let you pay medical bills with pretax dollars, are surging. Here are four essential things to know about HSAs. authors: - name: Elizabeth O'Brien role: Deputy Editor url: https://money.com/author/elizabeth-obrien/ bio: Elizabeth O’Brien is Money's deputy editor. She has covered personal finance for more than 10 years, with a focus on retirement planning and health care. Subscribe to her weekly newsletter, Retire with Money. at_money_since: 2016 articles: 194 covers: - Insurance - Business - Career Advice - Credit - Economy and Politics - Education - Health and Wellness - Housing - Identity Theft - Investing - Lifestyle - Loans - Personal Finance - Pets - Retirement - Shopping - Taxes - Technology social: - https://twitter.com/elizobrien former_staff: true published: '2016-09-12T10:04:30.000Z' modified: '2024-04-17T03:17:06.000Z' section: Insurance tags: - Health Care - health savings accounts word_count: 425 canonical: https://money.com/health-savings-accounts-what-know/ type: Article source: structured-blocks --- > **Disclosure:** We research all brands listed and may earn a fee from our partners. Research and financial considerations may influence how brands are displayed. Not all brands are included. [Learn more](https://money.com/page/disclaimer/). ![160912_PHE](https://img.money.com/2016/09/160912_phe.jpg) Health savings accounts, which let you pay medical bills with pretax dollars, are surging: 72% of large employers offered them in 2016, up from 40% in 2010, says the National Business Group on Health. Employers like HSAs because they work with some high-deductible insurance plans, which shift health costs to workers. And the accounts deliver a triple tax advantage: You add money pretax, and both growth and withdrawals for qualifying expenses are tax-free. Chances are you'll see one this fall. Here are four things you need to know. **1\. They're more flexible than you think.** As with an IRA, you can make prior-year contributions until April 15—giving you an extra chance to trim taxable income. For 2016, individuals can put aside up to $3,350, and families, $6,750—plus another $1,000 a year if you're 55 or older. And there's no use-it-or-lose-it rule: You can stash money away until you need it, or reimburse yourself retroactively for past expenses, as long as the account was open and you've kept your receipts. **2\. They're not just for the super healthy.** Despite conventional wisdom, HSA-eligible plans can pay off even if you don't have ultra-low medical bills. [High-deductible employer plans](https://money.com/health-insurance-high-deductible-plans-risk/) generally cost individuals $1,000 to $2,000 less in annual premiums than traditional insurance, says Eric Remjeske, of HSA consultant Devenir. And many firms sweeten the deal, adding an average of $1,021 to workers' accounts, the Employee Benefit Research Institute (EBRI) finds. One way to compare plans is to weigh worst-case scenarios: To do so, add the out-of-pocket max to your yearly premium. **3\. You're probably using yours wrong.** The single best HSA move you can make is to max out contributions every year, says Greg Geisler, who teaches accounting at University of Missouri at Saint Louis—but only 15% of users actually do so, EBRI finds. Then, keep enough in cash to cover short-term needs (co-pays, deductibles), but invest the rest in a mix of [stock and bond funds](https://money.com/money-50-best-mutual-funds-etfs-2016/) for retirement medical expenses. Just 3% to 4% of HSA holders put their money in investments aimed at a long time horizon, Remjeske says. **4\. A good HSA is tough to find (on your own).** If you change jobs, you get to keep your HSA—but you could pay more once you lose your employee discount. And locating a cheaper one is tricky. "The options can be difficult to find, and there's a wide range of fees," says Eric Dowley, who runs Fidelity's HSA business. Some accounts charge maintenance or debit card fees; others have no investment options. 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