- High-Deductible Requirement
In order to be an eligible individual qualified for Health Savings Account, you must enroll a High-Deductible Health Plan, which may incur greater financial burden on you than other types of health insurance. Though High-Deductible Health Plan may be able to save you some money for premiums each month, it can still be quite difficult to pay for expensive medical procedures even if you have money in your HSA. If someone is expecting expensive medical procedures, this amount of money might be too high to bear.
- Pressure to Save
The pressure to save for the HAS account may prevent some people from healthcare plans for lack of money or other reasons.
- Taxes and Penalties
Withdrawal for non-qualified expenses or non-medical expenses may incur penalty as high as 20% before you turn 65. Even if you are over 65 years old, you’ll owe taxes for non-qualified expenses.
Receipts for qualified medical expenses must be kept in case of the IRS audition. Otherwise you will not be able to prove that the expenses are qualified.
Monthly maintenance fee and fees for every transaction will be charged by some HSAs according to different requirements by different institution. The fees are certainly higher than the interests from your deposit in your HSA, but a minimum balance may help you waive those fees.
- Limited beneficiaries
Many medical organizations, such as the American Public Health Association, are against health savings accounts because they think HSAs benefit only healthy, younger people while make the health care system more expensive for everyone else. People with comparatively lower income are more likely to be uninsured because they do not have enough money to benefit from the tax breaks offered by health savings accounts.