Many companies provide Health Savings Accounts (HSAs) as part of their health plans. Some may also contribute to or match their employee’s contributions to encourage them to use this benefit. HSAs can help with out-of-pocket medical expenses that your insurance does not cover.
Ideally, you won't have to use this account for healthcare expenses. Instead, you can maximize the benefits of the HSA using it as a retirement saving tool***. You could pay in the most amount of money allowed, invest it wisely, and let it grow over time.
HSAs can be useful for saving money, but most Americans can't maximize their accounts because of existing financial commitments. Many don't have enough funds in their HSAs to pay for their deductible for a single year.
The purpose of HSAs is to help with medical expenses and to improve financial well-being over time. But the research on how HSAs are currently being used tells a drastically different story.
The divide between theory and reality
In 2023, the most money you can contribute to an HSA is $3,850 if you have individual coverage or $7,750 if you have a family plan.
High-Deductible Health Plans (HDHPs) have a minimum deductible of $1,500. But on average, Americans pay even higher deductibles. According to the Kaiser Family Foundation, in 2022 the average deductible for employer-sponsored individual health coverage was $1,763. For employer-sponsored family coverage, the average deductible was $6,106.
Let's see how HSAs work in practice. Imagine an employee named Anna. If Anna contributes the most money allowed into her HSA in one year, she should have enough funds to pay her deductible the following year and beyond.
For example, if she has an individual plan with an HSA max of $3,850 and a $1,763 deductible, she will have $2,087 left over after paying her deductible. If she has a family plan with an HSA max of $7,750 and a $6,106 deductible, she will have $1,644 remaining.
HSA funds remaining after meeting deductible
Eventually, Anna could even invest a portion of her HSA balance without worrying about affording her out-of-pocket expenses.
However, this assumes that Anna can afford to contribute to her HSA and leave the money there for a while to grow. This might be possible for people with higher incomes, but not for all people.
But research shows that very few people can fully benefit from HSAs. Only 7% of HSAs have investments other than cash. Even among those who invest, most still withdraw money from their HSAs, which means only a very small percentage of people can use their HSAs to build long-term wealth.
At the same time, almost 80% of people with HDHPs don't have enough money in their accounts to cover a single year of out-of-pocket medical expenses. They either can't afford to keep money in their HSAs, or they use it all up to pay for medical costs and still don't have enough.
Bridge the gap with a Health Payment Account
Being able to pay your deductible and use your HSA is essential to enhancing your well-being. To make this happen, it’s important to be able to afford your out-of-pocket medical expenses without relying on harmful ways of paying, like credit cards or payday loans. That's where Paytient comes in.
Paytient is a Health Payment Account* offered by your employer or health plan. It works alongside your current health plan to give you more options when it comes to paying for your healthcare**.
Whether you are delaying care due to high deductible costs or unable to take full advantage of your HSA, Paytient can help.
Paytient gives you the power to pay
If you're struggling to cover your out-of-pocket healthcare expenses and struggling to contribute to an HSA, Paytient offers a flexible solution*. With Paytient you can pay your healthcare bills** over time (without any interest or fees), avoid delays in necessary care, and prevent escalating debt.
*Subject to approval
**The Paytient card works with providers in certain approved merchant categories. The provider self-selects their merchant category, and in some cases a provider might not be categorized as expected. Not all plans support all spend categories, please check with your plan administrator for information on which categories your plan supports.
***This content is for informational purposes only – it should not be treated as legal, tax, investment, or financial advice. Please consult with your tax or financial advisor for advice specific to your situation.