Health Saving Accounts (HSA) have basically replaced Flexible Spending Accounts (FSA) in this new world of healthcare and high deductible health plans (HDHP). These HSA's are required by employees who are under an employer sponsored HDHP.
Like the predecessor FSA, these new accounts allow the consumer to save money for health care expenses, however they don't have the 'use or lose it feature' and funds over $2,000 can be invested in stocks, bonds, or mutual funds.
Usage of the investment option is limited for now; the funds are either exhausted on expenses, the money simply accumulates for future health care items, or it is invested in the most conservative manner.
But as more organizations turn to high deductible health plans to increase corporate saving, many HSA's will be held by younger, healthier individuals who will have the opportunity to build money in the accounts. With Wall street looking for future growth, this increasing market -- over $18 billion, will provide incentive to encourage investment in the stock market.
Account holders be wary when this happens! Remember these accounts are not intended as long-term investment, which due to the time factor can afford to lose money during certain periods. The HSA's are designed for account holders to have sufficient funds available for medical expenses; which by their nature can be sudden and unexpected, requiring a more conservative approach for investing.
