From: Tad Borek 
Newsgroups: misc.invest.financial-plan
Subject: Re: Anyone have HSA (health savings account)
Date: Wed, 2 Aug 2006 10:53:37 -0500
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me@privacy.net wrote:
> Myself. Single and no kids
> 
> Some [income]. Part time work only
>
> Some [cash sitting around]

OK few details to add:

* The 2006 HSA contribution limit is $2700 for an individual, $5450 for 
family coverage, even if the plan's deductible is higher. If the 
deductible is lower, your contribution limit is equal to the deductible. 
You couldn't put in $5k in a single year.
* this limit is prorated for the number of full months you're covered 
during the year (eg 6 months in 2006 means $1350 limit)
* A principal benefit of making that HSA contribution is that you write 
off, say, $2700 from your income, and your taxes are lowered 
accordingly. But it sounds like you might be in a low tax bracket anyway 
so that benefit would be small. You might even be in the 0% bracket.
* On the flip side if you don't use the $2700 it sits there earning 
interest (or, eventually, sitting in mutual funds, if you choose) and 
you can tap the account for medical expenses later. Some details - Will 
posted this link on a prior thread - helpful info, I learned a few things:
http://www.ustreas.gov/offices/public-affairs/hsa/faq_using.shtml#hsa16

* If you never use the $ and it just grows over the years, then upon 
retirement you can essentially treat it as another IRA. So one way to 
look at an HSA is a $2700 IRA contribution that you can tap into for 
medical expenses along the way. In that view the benefit 10+ years from 
now might be attractive even if you get no immediate tax benefit.

Netted out though I suspect a student plan, if you find one, would be a 
better fit at this point. If you had an extra $2700 sitting around you 
could stick it in a Roth IRA. [If you've maxed that out - well heck how 
many college students are rolling in dough like that? If you are, borrow 
less, maybe?] Four years from now you can revisit all this after your 
student plan goes away. By then it's conceivable we'll see new offerings 
in health insurance anyway.

And to answer your original question directly - I have an HSA and 
started with the original MSA program. But I'm able to shift $ from 
savings into them every year and I get a tax benefit from those 
contributions. If I were a student I'd certainly look into a student 
plan instead.

-Tad