"The future is mine to shape. I like being smart with my money, especially saving on taxes and saving more for the future."

Adam is young, healthy and single. When he left his previous employer to start his own company, he was eligible for COBRA continuation coverage-but he would have had to pay 100% of the premiums plus administrative fees, amounting to over $300 a month in premiums. Adam felt he had better uses for this money, so he opted for an Individual HSA compatible plan, which cost him about $80 a month. In the past, Adam rarely reached his yearly deductible since he hardly ever went to the doctor, so he felt comfortable taking on a higher deductible. Although he doesn't have many medical expenses now, his plan is to get ahead and contribute his monthly premium savings into his HSA for future healthcare needs.

Comparison

Summary

Adam was able to tax-deduct his HSA contribution from his income at the end of the year. On the rare occasion he does have medical expenses, Adam has the convenience of a debit card to ensure those services are paid for, tax-free. Also, by applying his annual premiums savings to his out-of-pocket maximum, even if he has major medical claims he would actually spend less on the new plan. This means more money stays in his HSA and continues to grow for future needs. If he continues to contribute the maximum to his HSA, in ten years the account will have grown to $34,881. To see how much money your HSA can grow to, use our Future Value Calculator.