Ohio Public Employees Should Consider the Benefits of a Health Savings Account (HSA)

Many OP&F, OPERS, and STRS members retire before they are eligible for Medicare. A retiree is eligible for the healthcare stipend unless they have access to any other group coverage. If a pension member has a spouse or dependent children, this could increase the stipend amount they are eligible for. However, if the spouse or dependents have access to any other group coverage through an employer or retirement coverage, they are not eligible for the stipend.

How to get access to an HSA

If employers offer a High Deductible Health Plan (HDHP), you will have access to a health savings account. HSAs can provide some key benefits before and after retirement. What are some of the benefits of having access to an HSA before and after retirement?

• Higher deductibles often have lower monthly premiums.
• Triple tax advantage – Contributions are made pre-tax, the growth is tax-free, and the withdrawals are tax-free as long as they are used for qualified medical expenses.
• Opportunity to invest within your HSA as long as you meet the minimum balance required by your HSA custodian.

How to utilize an HSA to your advantage for retirement

Pension members with low healthcare costs or with sufficient cash flow should consider paying out of pocket for medical expenses. This will allow the HSA to be invested and grow over time.

HSA Contribution Limits

The 2023 annual max contribution limit:

• Self-Coverage - $3,850
• Family Coverage - $7,750

If your employer provides a contribution to your HSA, the max limit still applies.

• Example: Your employer provides $3,000 to your family plan. The max you can contribute without being penalized is $4,750 ($7,750 in total contributions).

If you have questions or are interested in finding out if this would be a good option for you and your family, please reach out to our office.