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By Lively | November 14, 2017

The HSA Mindset

I have good news and bad news. Let’s start with the good news. HSAs account for over 21M individual account holders today and are growing incredibly fast. This includes over $43 billion in assets of which $6.8 billion is invested. This is very similar, no better, than the trajectory the 401k market saw in the late 1980s and early 1990s. Now everyone you know has a 401k.

The bad news is that 37% of people who were eligible for an HSA still do not have one. This is lost health savings, lost tax savings, and lower financial security for many Americans. The reasons vary, but the top factors include financial constraints and need. Top reasons for not opening an HSA if you are eligible are:

  • 33% said they didn’t have the money to contribute
  • 31% said they didn’t see the need.

Other top reasons to not open an HSA included: too much trouble, too complicated, and too hard to upload receipts.

The HSA Mindset

So what is the HSA mindset? Think of it as a hybrid of your friendly neighborhood boy scout and a cutting-edge technology expert. Is it sexy, no, or maybe it is in the same way that super-fast wifi makes you smile! It is, however, one of the most practical, reliable, and dependable healthcare options available on the market. You might not seek it out, but you sure know it will be missed if you lose it.

HSAs provide the dedicated health savings you need to ensure you are covered when you need to most. You get healthcare not because you want to use it, but because you want a health safety net. An HSA follows the same train of thought, but unlike a healthcare plan, it’s your money! Save it, Spend it or Invest it.

Why open an HSA even if you don’t have the money today?

HSAs provide a great opportunity to pay for unexpected health costs, even if you need to contribute after the fact. Once you have “established” your HSA, you can use tax-free dollars to pay for medical bills and other qualified out-of-pocket medical expenses, even if you add those contributions after the quality event. In that sense, it works… RETROACTIVELY. Opening an HSA gives you options for health saving, spending and investing in the future. Opening an HSA is a very important step into creating those options, don’t make the mistake of waiting, even if you don’t have the money today. $1 is all you need to get started.

Don’t you like free money?

HSAs offer triple-tax advantages that include tax-deductible contributions, tax-free interest/investment gains and tax-free withdrawals for qualified medical expenses. This means you aren’t paying income taxes (most states or federal) if you use the money to pay for any qualified out-of-pocket medical expenses. Healthcare costs continue to increase, HSAs provide an actionable way to limit those cost increases on your savings and income.

But you might be wondering, what happens to that money if you don’t spend it, or want to spend it on qualified medical expenses? After the age of 65, you can use your HSA for anything just like a 401k or IRA. Save today, so can spend tomorrow. It’s like a 2-for-1 deal. It’s nearly impossible to find this level of flexibility in the healthcare space, HSAs are truly unique. If you save tax-free money with your HSA today, you can add HSA investment options to let that money grow and increase the return on your original savings. More money for you, more money to save for health expenses or to use in retirement.

Most HSA platforms are Annoying

Ok, you got us. We agree with you. The HSA industry is largely dominated by banks and other financial institutions with outdated technology. They charge nominal and frustrating fees just to use your HSA debit card for example and you get stuck waiting on the phone to speak to customer service for hours at a time. They make it hard to get your HSA money when you need it most.

These exact reasons were the foundation for Lively. Lively has built a modern HSA platform from the ground up. By focusing on user experience and design, Lively offers a fresh approach to the HSA. We don’t nickel and dime our users and we are FREE for individuals.

To make it easy for you, We offer paperless onboarding and administration making it really simple to sign up and use your HSA. You can access your funds via a Lively-branded debit card for qualified medical expenses and manage your account online. Plus we have a team of dedicated customer service members ready to take your call. At Lively, we think of an HSA like an extra pair of socks on a cold night. Oh so cozy. See the mindset for yourself and get started today.

If you need more help with open enrollment decisions, check out our blog. We will make you a healthcare benefits expert in no time, without any extra work or effort on your end.