When Mike McKee thinks about saving money for the future, he has a few priorities. Maxing out his retirement is one. Building up his kid’s college fund is another.
Opening up a health savings account? Not so much, even though he qualifies because of his high-deductible health plan.
“I’m so frustrated with the system that has anything to do with medical savings,” said McKee, 42, a self-employed musician in Nashville. “I’m just so turned off emotionally that I have to be really careful to be logical about it.”
More Americans are eligible to open an HSA — a kind of tax-free savings account that lets them sock away money for medical expenses — after changes that were part of new legislation last year. But an HSA can be a headache to set up and navigate.
Here’s what to know about how they work and when they’re worth it.