Decision Time: Why an HSA is Right for Me

Young Man Mountain Biking In Desert

In my last post, I talked about the different types of health insurance plans. As a millennial, I had to weigh a lot of factors before choosing one.

Fortunately, my parents let me stay on their plan while I got a foothold on covering my expenses completely. I needed to do this in order to survive financially and physically.

Statistically, more millennials extend their time on their parent’s coverage for as long as possible (to age 26). However, I never realized just how few people my age have their own health insurance plans, either through their workplace benefits or via the Affordable Care Act (ACA).

I started asking some of my college buddies. Out of each of the dozen or so I asked – some freelancers, some working full time, some living on their own and some still living at home – every single one of them was still on mom and dad’s health care plan.

Of course, our parents have worked longer and, in general, have higher salaries and a better benefits package. But, young people in good health often don’t want their pay gouged for something that isn’t tangible.

Rent, groceries, even a car payment take precedence at this age. Health care enrollment? Investing for retirement? We can talk about all that when we put a dent in our student loans. Clearly, staying on a parent’s plan seems like your best bet if you can.

That’s how I felt, too, until I got engaged.

Fortunately, about this time, I also started a great job and moved out of the apartment with chipping lead-based paint I was living in. By all accounts, things seemed to be looking up, and I felt ready for newer and better ways of living.

Taking the health care plunge

Along with planning a wedding, I had to take my health care choice (or lack of) off cruise control. I needed to make some decisions, since you can’t stay on your parent’s plan once you get married.

This time around, I held onto my new enrollment packet and actually read it – now facing down new and un-ticked boxes the average millennial might not typically need to (or get to) evaluate. I did my research, instead of just shopping by the lowest price.

We determined that Health Savings Account (HSA) seemed to be the best option. You only need it if you get sick. The copays might be higher for health care specialists, but it also allows for less off the top of your paycheck overall, (or a lower premium) than other traditional plans.

And, because contributions to the HSA are tax-free, you can tuck away $3,350 when you’re single. When married, you can put aside up to $6,750.

So, if you’re still regularly ordering pizza at an ungodly hour or figuring out where there’s room in your budget for your other expenses and wants, the HSA can slot in with those other prioritizations in the millennial expense sheet quite nicely when the time does come.

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