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  Health Savings Accounts

A Health Savings Account (HSA) allows you to save and pay for current and future health care expenses in a tax-advantaged way. You can contribute to a HSA on a pre-tax basis through payroll deductions. Contributions to your HSA belong to you – even if you choose to retire or leave your current employer in the future. There is no “use it or lose it” rule like a Flexible Spending Account. In a HSA you can use your funds as needed to pay for current health care expenses or rollover unused funds from year-to-year and continue to grow your account tax-free.

Assets contributed to and invested in a HSA actually have a tax deferred status that combines both the advantage of pre-tax contributions and tax-free withdrawals, making it the most tax favored investment account available. The maximum contribution to a HSA plan in 2013 is $3,250 for an individual and $6,450 for a family. An annual catch-up contribution of $1,000 is allowed for participants age 50 and older either under an individual or family plan.

Many employers now offer the HSA as part of an employee health insurance package. Each company’s HSA offers a different number of investment options in which participants can invest contributions. We have developed model portfolios for a number of companies that offer these plans. Model portfolio allocations for the HSA accounts can be found through our “Your 401(k)” section of the website.

Keep in mind that assets invested in the model portfolios should have at least a five year time horizon. Assets in your HSA needed for near-term medical expenses should be held in a very conservative investment option. Visit our website in the future for updates on the HSA plans and periodic updates to our HSA model portfolios.

The The HSA Model Portfolios are provided as a courtesy of Mainstay Capital Management as general investment advice and do not constitute a specific investment recommendation. All material presented concerning HSAs and contained in the HSA Model Portfolios is compiled from sources believed reliable, but its accuracy and completeness, and the opinions based thereon, are not guaranteed and MCM assumes no responsibility for errors and omissions. Before buying any mutual fund, an investor should read its prospectus and Statement of Additional Information carefully.