Your Money Adviser: How to Get the Most From a Health Savings Account

Choosing a health savings account can be daunting, especially for people funding one for the first time. But some comparison shopping can help minimize fees and maximize savings, researchers say.

Providers of health savings accounts are generally doing a better job of disclosing details like fees and investment options, said Leo Acheson, associate director of multiasset and alternative strategies at the financial research firm Morningstar. But, he added, “there’s still some room for improvement.”

While updating an analysis of 10 big providers of the accounts, he said, Morningstar found that just four made all details — like fees charged — available on their websites.

A health savings account, or H.S.A. — available when paired with a specific type of high-deductible health insurance plan — offers triple tax benefits. You can contribute to an H.S.A. through paycheck deductions, reducing your taxable income; interest or investment gains are tax free; and withdrawals aren’t taxed, either, as long as you spend the money on eligible items or treatment. (If you don’t have health coverage through your employer, you can make tax-deductible contributions on your own to an H.S.A., as long you have a compatible health plan.)

Money in the accounts can be used for current health and medical expenses, or invested for care in the future. According to Fidelity Investments, a couple who are 65 years old and retiring in 2018 may need about $280,000 to cover health costs in retirement, and funding an H.S.A. can help with that burden.

But most H.S.A. holders don’t appear to be saving for the long term, according to findings from the

Keep reading this article on The New York Times Your Money.