HSA for President

An HSA is more than a debit card for doctor bills.

I prefer contributing through payroll when possible. You can contribute after-tax dollars and claim a deduction later, but qualifying payroll contributions can also avoid Social Security and Medicare taxes. Same account. Better tax treatment.

I also keep part of the HSA in cash. If my deductible is around $2,000, I want about that much available without having to sell investments. That is not an IRS rule. It is simply my way of making sure the HSA can actually cover the risk that comes with a high-deductible plan.

Money above that reserve can be invested for the long term.

There is another useful wrinkle. You can pay a qualified medical expense out of pocket, keep the receipt, and potentially reimburse yourself from the HSA later. That can leave more money invested for longer.

My approach is simple: contribute through payroll, keep the deductible available in cash, invest the rest, and save the receipts.

That is when an HSA starts to look like more than a medical spending account.