There’s an increasingly relevant solution to the rising cost of health care: the High-Deductible Health Plan (HDHP). These plans do just what they say they’ll do: they pair lower, more affordable premiums with higher deductibles. More importantly, they open the door for employees to begin contributing to a Health Savings Account (HSA), which can have benefits that last long into retirement.
Favored for its flexibility, the real benefit of the HSA is its inherent tax advantages.
“From a tax perspective, it’s hands-down the best deal,” John Vellines, president of Health Savings Administrators, told Bloomberg. “You get a triple tax play of the deduction on your contribution, tax-deferred growth, and tax-free withdrawals when you use the account for health-care expenses.”