Hi Eric,

I think your comments are misleading. I’ll address each:

1) True you can only use it on qualified medical expenses, but it’s an extremely broad array of things that fall into that category. You technically only need receipts if you get audited, which the odds are slim (at least that is the case with the Optum HSA). Good records are always recommended, though, in case you need to prove anything.

Keep in mind that this acts as a retirement account as well. If you reach retirement age you can withdraw funds for non-medical expenses and simply pay taxes on it as if it was regular income.

2) This is dangerous logic as it basically says “shielding your income from taxes through tax-advantaged accounts isn’t worth it.” Again, this account can act similar to an IRA, but it has the added benefit of being available to pay for medical expenses tax free.

3) “The list of legitimate medical expenses not covered by health insurance is very small.” this is simply not true. The list of things covered is very broad. I do find it odd that your HSA benefit company is so involved in your management of funds. With my HSA you can literally withdraw dollars from an ATM to reimburse yourself.

4) “HSA’s do not gain interest so the money you pay into it sits, …I’d rather put that money to work for me.” 100% false. Once you hit a required minimum, say, $2,000, you can shift anything above and beyond that into an investment account. Your investment gains are not taxed. This is a HUGE benefit.

5) While this may seem like a lot for you, if you max out your HSA and shift dollars to an investment account the $5 fee is very reasonable. I have over $10k in my HSA with $8k+ in the investment portion of my account. The more I put in the less of a factor the fee is as a % of my total HSA fund.

I think your comment is misleading, Eric. Regardless of whether the money is deposited directly from your paycheck or from a written check, the tax deduction is exactly the same at year-end. Sure, you’re employer may not calculate your taxes the same way if you mail in a check versus have it flow through your paycheck, but it’s 100% the same tax deduction regardless of how your money gets there.

…but if your not contributing from your paycheck then there is NO point in contributing as that money has already been taxed. Now you put your taxed money into your HSA and you no longer have access to that money. It must be spent on a very defined list of things that you may or may not ever need. Keep your money, its YOURS!

Here is what I HATE:
1) It is YOUR money that your putting in YET, you are limited to what you can spend YOUR money on AND whatever you do spend it on, say a dental co-pay you must get a receipt to prove the purchase is legitimate. Real pain in the butt trying to go back and get receipts printed to cover expenses with your own money.

2) The tax savings is very little. I contribute about $3k per year I figure I am saying what, maybe $300 buck on that money? I’d much rather keep my own money and spend or invest how I want. Once you contribute your money to an HSA or flex spending account it is not yours anymore to do with as you choose.

3) You can’t take money out of an HSA unless it is for a legitimate medical expense. The list of legitimate medical expenses not covered by health insurance is very small. So again, not very useful for most people. My health insurance did not cover my chiropractor visits, so I used my HSA for that. However the HSA benefits company would not approve those expenses w/o a written letter from the chiropractor and printed and itemized receipts for every visit. It was such a pain in the butt, i’d rather have just used money out of my pocket and not dealt w/ the hassle. Again, its my money and I can’t use it!

4) HSA’s do not gain interest so the money you pay into it sits, …I’d rather put that money to work for me.

5) Many HSA charge a fee per month, Mine is about $5 …so after a year that is $60, …so my tax advantage gets even smaller.

….

Hi Sue, good to hear from you. It may depend based on who your HSA servicer is, but I just checked my HSA (through OptumHealth Bank) and you can easily deposit by linking a bank account. I believe there are also some “old fashioned” ways of depositing through a mailed check with a deposit form. Either way, there is a way to do it besides a payroll deduction.