How Not To Tear Your Family Apart

HSAs are not only tax-advantaged savings accounts, but individual account holders may invest the funds. You may choose one or both of these investment options: an interest-bearing investment account or an interest-bearing debit account. As part of your protection plan, they help avoid depleting a comprehensive retirement package by helping to pay for long-term care insurance premiums and medical expenses.

Jodi and Jackson mention health savings plans to the CPT as a future payment method if they purchase an insurance product. “Did you know that you can use an HSA account as a long-term care funding mechanism?”

Everyone shakes their heads. “Don’t feel bad. We also thought you couldn’t use an HSA account to pay for long-term care premiums, and we actually have HSAs! It’s a popular misconception when it comes to paying long-term care premiums. Although HSA funds cannot be used to pay regular health insurance premiums, Dad and I can withdraw money from either or both of our HSAs to pay for specialized types of insurance, such as long-term care insurance.”

Erik, looking hopeful, asks, “I have a flexible savings account at work? Is that the same?”

“No, sorry dear, it isn’t. But I am glad you asked. It’s easy to mix the two up since both FSAs and HSAs are pretax accounts you can use to pay for health-care related expenses.”