Many Americans Confused About What HSAs Cover
SAN FRANCISCO, Feb. 20, 2014 /PRNewswire/ -- Only eight percent of Americans have a Health Savings Account (HSA), but 50% say they are somewhat or very likely to use an HSA to cut their taxes, according to a new insuranceQuotes.com report.
Americans with high-deductible health insurance plans can put money into HSAs to help cover certain medical expenses. Their contributions are not subject to federal income taxes and can be invested (much like an IRA).
"Unlike a Flexible Spending Account, unused HSA funds roll over from year to year, and any money left over after age 65 can be used for retirement," explained Laura Adams, insuranceQuotes.com's senior analyst.
Many Americans are confused regarding HSA eligibility, benefits and other specifics. For example, only 14% of Americans know that an HSA must be paired with a high-deductible health insurance plan. People who buy coverage on the public health insurance exchanges are especially good candidates, since most of the purchased plans (including silver and bronze plans under Obamacare) are high-deductible plans.
A high deductible is defined as at least $1,250 for an individual and at least $2,500 for a family. insuranceQuotes.com found that only 16% of Americans who know that a high-deductible plan is required for an HSA correctly pegged this amount.
Furthermore, many Americans are confused about which medical expenses HSAs can be used for:
- 52% incorrectly think they can use HSAs to pay for over-the-counter medications
- 51% falsely believe they can use HSAs to pay for health insurance premiums
Popular expenses that HSAs can be used for include prescription medications, doctor visits, dentist visits and eyeglasses.
"With the advent of Obamacare, more Americans are eligible for a Health Savings Account than ever before, but most unfortunately don't have the necessary information to take advantage of them," Adams added.
The survey was conducted by Princeton Survey Research Associates International (PSRAI) and can be seen in its entirety here:
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PSRAI obtained telephone interviews with a nationally representative sample of 1,004 adults living in the continental United States. Interviews were conducted by landline (502) and cell phone (502, including 273 without a landline phone) in English and Spanish by Princeton Data Source from February 6-9, 2014. Statistical results are weighted to correct known demographic discrepancies. The margin of sampling error for the complete set of weighted data is plus or minus 3.5 percentage points.
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Publicist, Bankrate, Inc.