Understanding HSA: From Healthcare Reform to Retirement Wealth with John Young (Ep. 4)

 

Healthcare costs continue to rise, yet many people overlook one of the most powerful tools available for managing medical expenses while building long-term wealth.

How did we get disconnected from the true cost of healthcare, and what can we do about it today? How can a simple savings account transform both your approach to medical spending and your retirement planning?

In this episode, Jon Meyer sits down with John Young, CEO of Consumerdriven and HSA Industry Ambassador to the HSA Council of the American Bankers Association, to explore the origins and evolution of Health Savings Accounts. Together, they unpack the problems HSAs were designed to solve, common misconceptions that still exist today, and why only 10% of HSA holders are taking advantage of the investment feature that could dramatically change their financial future.

John discusses:

• The healthcare crisis of the 1970s that disconnected Americans from medical costs and led to HSA creation
• Why HSAs are timeless accounts that accumulate value across decades, not just annual spending tools
• How behavioral changes around healthcare consumption can save hundreds or thousands of dollars yearly
• The massive gap in HSA investing adoption and what’s preventing people from building retirement wealth
• Practical strategies for using HSAs as both spending accounts and long-term investment vehicles
• And more!

 

---

 

Watch us on YouTube at https://youtu.be/4mYelahG6Sk.

 

Connect with Jon Meyer:

• BGM
• LinkedIn: Jon Meyer
• Email: jmeyer@BGM360.com
• Schedule a Call

Connect with John Young:

• LinkedIn: John Young

 

---

Transcript

John Young: HSAs are timeless. They’re timeless. We normally look at employee benefits as like an annual garden. It’s an annual thing. We make an annual decision and at the end of the year, everything resets. And part of that is true when it comes to plan design from the health plan. But where an HSA is unique is that I can accumulate this money over time.

John Young: Most HSA designs. Our, here’s your deductible. It’s $2,000 and we’re gonna give you $500 towards that. We’re gonna give it to you all upfront and now, so your real deductible is 1500 because we’ve given you 500 towards that. I think a better way is to say, I’ll put a dollar in for every dollar you put in, we’re going to get people to save.

John Young: When we get that light bulb to go off, that shows them how much sense that makes both short term and long term.

Welcome to Mastering the 360 Mindset with Jon Meyer from BGM. Join us as we explore ways to make the most out of your wealth, health, and time. Unlocking opportunities for balance and lasting success.

With insights from Jon’s years of experience and guest experts, you’ll gain the tools to design a life that works on your terms. Now onto the show,

Jon Meyer: Today’s episode is a treat for anyone who’s ever wondered how health savings accounts or HSAs came to be. These accounts have quietly become one of the most powerful tools for building long-term wealth.

Jon Meyer: And today’s guest, John Young, was there at the very beginning. I consider John kind of the OG of HSAs. John’s the CEO of Consumerdriven. John also is the HSA Industry ambassador to the HSA Council of the American Bankers Association. And with that, I wanna welcome John to the show. Thank you, John. Great to be here.

Jon Meyer: All right, John, I want you to start off by just telling us what is Consumerdriven healthcare even? Wow.

John Young: Well, it’s not a rel it’s not a new idea. Um, it’s been around for 25 years. This notion, this idea of let’s power, let’s empower the infra, the the consumer. Let’s empower the individual on how to make better and more prudent healthcare decisions.

John Young: And so what goes along with that is often a plan, a plan design that incorporates some forms of financial incentives. Access to information where someone can actually act on that information and make different decisions, help that individual understand the difference between the time they’re a consumer and the time they’re a patient.

John Young: In other words, help them understand how to navigate healthcare services that are generalized, uh, commodities. Um. Now there’s some conditions in Consumerdriven healthcare in my mind, beyond just having the proper plan design and a support around the tools, resources, and incentives, it has to work for people that are.

John Young: Technically savvy and those who are not, it has to, it has to work for those people that are sick as those that are, well, it has to give people an opportunity to win. The idea that is so new and still relatively underutilized is the idea of giving people kind of a in pocket money to spend, and if they don’t spend it, they get to keep it.

John Young: That was, uh, some of the background of kind of the development of se Consumerdriven healthcare, uh, which lent itself into the HSA value proposition.

Jon Meyer: Yeah, and I think that’s interesting because when we talk about the intersection of health, wealth, and time, we’re always talking about the health piece to this.

Jon Meyer: And one of the things that we’ve talked about with our clients is that Healthcare 2.0 is very different than Healthcare 3.0. Healthcare 3.0 is more about proactive use of healthcare. And with that, oftentimes you have to kind of ignore whether or not insurance pays for it and just use cash. And that’s why we get excited about HSAs as such a tool.

Jon Meyer: Um, I want you to take us way back to the beginning of HSAs because you actually were there when the problem was first being addressed. Um, you know, what was the problem you guys were trying to solve, and since you were the one in that did testify in front of, uh, the Department of Labor on this whole concept, what’s kind of the biggest misconception lawmakers and regulators had at the time about HSAs and maybe how has it even changed?

John Young: Great question, John. So what were we trying to solve? You know, in the seventies we embarked on an experiment with the HMO Act. Nixon signed it into law and the idea was, you know, let’s, let’s let the physicians kind of manage the costs and we gave individuals. Really rich benefit designs. I mean, they were used to deductibles before the HMO Revolution and now all those went away.

John Young: In fact, I remember early in my career, and I’ve been in the in benefits industry for 40 years, early in my career, those plan designs were basically everything was free, free hospitalization, free office visits, the. Pharmacy was like maybe a $2 and 50 cent copay. That was it. But it disconnected us from the price of healthcare and there was no downside for overutilizing.

John Young: And because of that, people just got in the habit of going into the doctor for any anything and everything. And so what we were trying to solve with Consumerdriven healthcare with HSAs were a couple things. One is to reconnect people with the actual cost of healthcare. Giving them a chance and an incentive, a financial incentive to pause before acting, becoming more prudent around consumption, healthcare consumption.

John Young: And we did so with a financial instrument that was an is unlike. Any that is out there today, right? It’s tax-free contributions. Tax-free growth, tax-free distributions for qualified medical expenses. There’s nothing in the world like it. One of the things we discovered is when we designed these plans that put these financial incentives in place and these tax-free accounts in place that we could give.

John Young: Employees the same actuarial value in a health plan that a traditional plan offered, and we could save double digits in the first year just because we could influence utilization.

Yep.

John Young: So directly you give people financial incentives, give them tools and resources to to, to know their alternatives.

John Young: They’re gonna behave differently. And we solved that with, um, with that. Now, misconceptions very early, and I remember this in many meetings on the Hill with Congress, people, senators, staff members, oh, you know what we hear? This is just good for the rich. And the great firm Devonne, which is based here in Minnesota, led by Eric Eski and, and a fine group of folks, including John Robb, have done a lot of research and on behalf of the HSA Council, they did a demographic report.

John Young: And what’s really interesting is that 64%. HSA account holders live in zip codes where the median income is below a hundred thousand dollars. There’s a, there’s 179 million people that have private insurance and 59 million of those, so about a third have and are covered by HSAs. So it’s not for the rich, it’s meeting the needs everywhere.

John Young: Nonetheless, I have some. Ideas that I wanna bring up later around plan design that employers can do to make these more equitable for their workers, that make considerably less than their, their executive teams, some way of bringing some parity into the value of this offering.

Jon Meyer: So to what you’re saying though, is that you’re, you’re, you’re painting a picture where these things are the best things ever.

Jon Meyer: That’s not always what I think the end user experiences. Is this just a communication failure or is there something else that just went off the rails in the middle here,

John Young: there’s a lot of things that, uh, have gone off the rails and it is true that HSAs, even though there are 40 million of them today, is growing at a, in a less robust trend line than 401ks.

John Young: Did. HSAs are admittedly a complex. It’s a complex little monster with three parts, right? There’s a healthcare part, there’s a banking part, and there’s an investing part, and none of those industries understand each other, right? Healthcare, they care about belly buttons. Getting people well, getting people into the right place at the right time for the right price.

John Young: Banks. Banks care about transactions. They care about account balances, they care about transactions, and they make the money if you keep the money in the bank. This is, this is an issue with, um, with how communications have been treated in the past, and then investment companies, they care about. The global economy, they don’t care about, um, the sa They care about compliance.

John Young: They care, so do banks, but they, they care about things differently than a health plan would or a bank would. They care about how their basket. Funds compared to a competitor, for example, they’re looking at returns, they’re looking at, um, you know, the dynamics day in day out. So these, these plans are complex to the individual.

John Young: And you know what, I think one of the things that’s in the way is that individuals have just, you know, they just don’t want one more thing. They don’t want to have to be responsible to figure out how these three different industries work together In these HSAs, they show up for their open enrollment.

John Young: They half listen to the communication meeting because they’re thinking about other things, and they got other meetings that they gotta do that day. They just don’t embrace or metabolize the value proposition of HSAs. And if people understood these things, I mean, really, truly understood HSAs, it wouldn’t be 40 million, it would be twice that easily.

John Young: And I wanna, I just wanna, ’cause I, you know, as an investment, uh, consultant, you know. You want people to be aware of that opportunity of investing. Of the 40 million HSAs, only 10%, one out of 10. That means that means 4 million are utilizing the investment feature of an HSA. Nine out of 10 are not, to me, that is.

John Young: Unconscionable because you can get so much further ahead with investing than you can by just keeping it in a bank account. And there’s this perverse disincentive in our industry that needs to be said. Banks, they’re monetized by having the money in the account. They make the net interest. They kind of don’t want you to pay attention to those investments.

John Young: These aren’t the droids you’re looking for. You know, they don’t want you to put the money in investing, which is ’cause you know, their, their monetization is all they, then they’ll give you lip service to that effect. But the reality is investing is coming on strong. Now I need to tell you how much is in, in these HSAs.

John Young: And I know this is a long-winded answer, but since I’m talking about the number of HSAs, there’s a hundred, and this is a report done again by the great company Devin Ear, led by Eric and the research analyst John Rob, and another team, um, of experts. They’re the kind of the trusted resource for our industry to kind of take all the data and tell us what’s going on.

John Young: There’s 159 billion, billion dollars in HSAs, and of the 159 billion that are in nhsa, 73. 73 billion. Nearly one half. It’s 46%. Nearly one half of all the assets are owned by those 10% of total HSAs. So the 4 million people have $73 billion in these accounts. So it’s very, very, uh, exciting time that I’m seeing investments becoming more and more important, more and more front running.

John Young: Because it’s good for the consumer, but just like there’s a misconception from lawmakers thinking that these were just good for the rich. There’s misconceptions on users. They think, oh, you know what, these are only for spending, I put money in here and I spend it kinda like they think it’s an FSA, maybe a kinder, gentler FSA, but they still don’t think of it in the timeless kind of nature of these HSAs, which I’ll talk about in a minute.

John Young: But, um, there’s just a, there’s a lot going on, uh, in our industry. That’s good.

Yep.

John Young: Understanding the literacy level of these things with normal people. You know, people that day in day out go to work and have one of these For an employee benefit, it’s relatively low, um, quite low. And that, that to me is kind of my mission, is to help organizations, help normal people, really get the value proposition of these things, and to use these HSAs pro appropriately.

Jon Meyer: I wanna unpack that. First, I wanna congratulate you about using two movie references in an answer. ’cause anyone that can touch on Star Wars and Austin Powers in the same references, stunning to me. Um, but let’s unpack it for a second because what you’re talking about are two separate issues. One is people’s actual behavior around healthcare choice once they have an HSA and the second is maybe their investing behavior.

Jon Meyer: And, and maybe that’s driven a little bit also by the big behemoths, but let’s go back to the people’s actual behavior. What have you learned about their actual behavior once they have an HSA around health and, and their, and their behavior around the choices they now have that are different?

John Young: Great question.

John Young: Let me answer it by, by telling you about my weekend,

Jon Meyer: this feels like I should like sit back and relax.

John Young: I went to, I went to two weddings this last weekend. One had a cash bar, one had an open bar. I behaved differently at those weddings. I was a better dancer at the open bar. Go figure. Right? The idea is, you know, at an open bar, people are wasting, they’re waste.

John Young: Their if, if their beer gets cold, they go get a fresh one at a cash bar. They’re making sure that they’re. Efficient. An HSA is putting kind of a cash bar mentality and ownership mentality into their healthcare behavior. A traditional plan doesn’t do that quite as well. Now, in the last 15 years, traditional plans have ramped up the cost sharing, but still it doesn’t have the same effect.

John Young: On individuals like an HSA does because it’s not a matter of not spending with an HSA, there’s the also the added kind of quality of accumulating money, growing it. So what happens with these HSAs, people start becoming more prudent around healthcare consumption. They start caring, they ask questions. I have saved hundreds of thousands and thousands of dollars by getting involved as more of a consumer, um, with my healthcare behavior.

John Young: I’m looking for lower cost pharmacy. I’m looking for lower cost MRIs, like an MRI is a great example of a commodity. You know, you basically have the same experience using a very similar machine. You’re just walking into a different address, and the prices can vary remarkably, and my doctor likes to send me to a specific place for an MRI and I can find it cheaper at some other freestanding.

John Young: Organizations and I take advantage of that and I save hundreds of dollars because why? It’s my money. The more money that I save, the more money I can accumulate. And these HSAs, this is so important. This is, this is what I’m about to say is so important. Many people don’t realize this. HSAs are timeless.

John Young: They’re timeless. We normally look at employee benefits as like an annual garden. It’s an annual thing. We make an annual decision and at the end of the year, everything resets. And part of that is true when it comes to plan design from the health plan, but where an HSA is unique is that I can accumulate this money over time and example years and years ago.

John Young: I wanna say it was about 12 years ago, I had a healthcare expense and I didn’t, I didn’t, I paid it outta my regular, like a regular charge card today if I wanted to, since I had an HSA all this time, I can use my HSA to reimburse me for that expense that I had 12 years ago. You know, it was $4,000. I could pull four grand outta my HSA and pay it back.

John Young: They’re timeless. So I can accumulate and grow my HSA well into retirement and then start seeking reimbursement if I have the means to pay for things along the way. Uh, out from another means other than the HSA. The HSA is always going to give me a tax-free reimbursement, but now I can grow it. Through the investing feature, and that’s gonna be just a, a win-win for me.

John Young: I’m just gonna have more in my HSA and I’ll be able to pay for that or reimburse that bill tax free back to myself and after age 65. This is another beautiful rule after age 65, if I take money out of my HSA for. Something other than healthcare. Let’s say I reimburse myself from my HSA for a big screen TV after age 65.

John Young: I’m just gonna be taxed on it. I’m not gonna be penalized. So in other words, my HSA turns into how a 401k works after age 65 for anything that’s not medical, for everything that is medical, always tax free reimbursement.

Jon Meyer: Yeah, and you touch upon something that I like, which is so many people as they save saving the 4 0 1 Ks or IRAs, and they’re not thinking about. 10, 20, 30 years later, they hit retirement and all their money’s in an account that when they pull it out, they gotta pay tax. And so when you have an HSA around much less any other dollars and other things, you now have a way to get money out without paying tax. Because in retirement, the biggest thing that we see with people on Medicare, it’s, it’s not that Medicare is bad, but Medicare doesn’t cover things like teeth.

Jon Meyer: And teeth are expensive

John Young: or hearing aids

Jon Meyer: or, yeah. And so you start or eyewear, absolutely. You start finding things like that where you’re like, oh my gosh, now I have a way to pay for it without the tax problem. So I love HSAs for that reason, and I try to get people to do what you’re saying, which is just bank your receipts, hold onto the money, invest it.

Jon Meyer: And that’s where I want to go next on the investing side. Um, let’s talk about that for a second because you did mention it earlier. Um. On the investing side right now, it does seem almost, um, difficult might be a word. Mm-hmm. They haven’t made it easy. Right. And my question to you is, is FinTech or ai or however you wanna think about this, going to eventually catch up a little bit to this, because it feels like right now investing is difficult for the average consumer.

John Young: Yeah, and it, it actually always has been. In fact, I’ve talked to so many. Account holders with an HSA who have said to me, I didn’t understand investing at all until I got my HSA. Now I’m buying mutual funds, or now I’m buying stocks. I mean, there are just as, there are so many different types of invest.

John Young: There’s so many kinds of ways you can invest, but let’s talk about what’s in the way, right? What’s often in the way. Is that the employee is never really retaining the investing education that, uh, they received maybe in the beginning or in the member packet. Banks are notoriously poor at making sure that this is a front grill conversation.

John Young: They like to talk about the spending. Characteristic. Now most of these funds are spent in fact, that Devonne report that just came out is tracking things through the end of June of 2025 for just a few months ago. And the data that’s out there, um, and I want to quote it specifically, is that $33 billion.

John Young: Were contributed January through the end of June, 2025 and 23 billion was spent. In other words, 70% was spent and 30% was retained and. You will find some organizations that do a great job explaining the need to retain, to put in more than maybe they figure to spend. If people can, it’s a wonderful savings vehicle.

John Young: But the, the fact is these are foremost spending accounts. People use them to buy and reimburse them their medical, dental, vision, expenses that they have. Through that HSA account, and if we can spend some extra time with an individual and show them how easy it is to invest, and again. Some environments, it’s not so easy to figure this out.

John Young: And often A-A-H-S-A plan will have a restriction. The bank will set up a restriction that says you can’t invest until you have 2000 in your HSA or maybe a thousand in your HSA. And after that you can move money into investing. How easy is it and what kinds of investments is it all self-directed?

John Young: There’s, there’s a, a growing need, I think, for features that allow a managed approach, meaning, here’s my money, please, somebody who knows investing, take it and do it for me. There’s the mutual fund, um, approach, which, you know, you have different asset classes, a little temperament test to help people understand how they themselves might wanna consider splitting it up.

John Young: Then there’s some that just, uh, there’s new ideas out there that are gonna be all crypto, all Bitcoin. Very excited about that. There’s a up and coming organization called Sound, HSA that’s doing that. Um, we’re going to get people to save when we get that light bulb to go off, that shows them how much sense that makes both short term and long term.

John Young: So. John, this is your world and I’m sure the regular population of America is not ready to retire ’cause they just haven’t been saving or investing. It’s the same problem in the HSA, only 10%. But those who have been doing it and have been doing it a long time, have been able to amass quite a bit of money in these investings investments.

John Young: I have about, I have 12 different HSAs and I’ve got about altogether probably 70,000 in these HSAs. Um, mostly all in investing. Um. Different instruments there and there’s, there’s, there’s been times I’ve made bad decisions with investing and, uh, have lost money in my investing, but overall I’ve done, I think I’ve done okay.

John Young: You know, that I am wired to have someone like you help me with all my investment decisions. I just don’t feel like I’m smart enough to know what to invest in and that I think. That complexity often stops people from adopting an investing strategy for themselves with their HSA, and to help someone over that line to show them, Hey, you can put it in a money market if you want, and do better than what the bank is doing.

John Young: Uh, we can get people to baby step further and further into investing. And like I mentioned. Tons of people have told me I did not really appreciate investing until I had my HSA. Now I, now I do. And it’s kind of fun. A lot of these environments allow you to pick and choose and self-direct. Um, a lot of them have curated mutual funds.

John Young: A lot of them have access to the open market, any stock or bond. That sort of thing. And then there’s, um, there’s others that are, that give you a managed approach. So it just needs to be understood and gently rolled out in snackable ways that people can kind of embrace it and figure it out. The opportunity’s huge ginormous going forward.

John Young: We have 159 billion. It’s gonna be over 200 billion in couple years. Devonne predicts by 2027 it’ll be over 200, maybe 206 billion I think is there’s, is what they’re guessing. I mean, this is nothing but going to keep growing and particularly in the investment area. And it should, that’s where it should grow.

Jon Meyer: Yeah. What’s, what’s interesting to me. If I think back to how 4 0 1 Ks developed too, they were very opaque and and difficult to use for a lot of years. And as more money went into ’em, then companies, big companies said, oh, we can make cash, so we’re gonna actually try to come up with easier solutions. And I think HSAs are starting to get there a little bit because I would say like six, eight years ago, HSAs were the most. Impossible kind of account to work with. And today we’re starting to see the big firms come out with, like I said, maybe a FinTech solution that’s easier to use.

John Young: Yeah. You know, I wanna address that. The, um, artificial intelligence is, um, and I’m a, in a lot of networking groups, uh, around this and I use a variety of tools and resources.

John Young: Are absolutely going to be more and more essential to helping people understand these HSAs. There’s snackable ways that we can create ai re, you know, output that helps people along the way to understand how to invest in these HSAs. Um, there’s all sorts of ideas out there of. Tapping into how we’re spending money on our regular bank cards and how much of that is qualified medical expenses.

John Young: That could be, in fact reimbursed by an HSA, so that we have this growing total of, um, kind of a, a vault of receipts and content so that we know exactly what we can use it for. You see, a an HSA will let you reimburse. Any Section two 13 D medical expense. Those that are found in publication 5 0 2 of the Internal Revenue Service, um, documents that they update every year.

John Young: There’s a lot of things that are two 13 expenses that health plans just don’t cover. So people are running out, you know, they’re buying over the counter medication, they’re buying sunscreen, those types of things. Someone can use and get reimbursed for either today or into the future from their HSA. So helping people see easily what they’re utilizing in qualified medical expenses can be a solution of FinTech.

John Young: Um, AI can get us, uh, I think a, a better stable of content that will. Resonate with different employees on how to use these things. ’cause some employees are just gonna be spenders. Some are not gonna contribute whatsoever. Some are gonna be investors and they’re not gonna spend anything whatsoever. Some are gonna be a hybrid, they’re part spenders, smart part investor.

John Young: I mean, there’s all sorts of things that an, that AI tool can, can, can help bring to bear.

Jon Meyer: Well, and what’s that? What’s the next big idea then in consumer healthcare and HSAs? Or, or is there something bigger coming that we just don’t see yet that only John Young knows?

John Young: Well, there’s, there’s a couple things that are gonna be a big lift for HSAs.

John Young: They’re not gonna have a short term, um, effect. It’s gonna be. Over longer term. And that’s, those are the provisions that the one big beautiful bill, um, put in for HSAs. I’ll get into that in a moment. Let’s talk about healthcare currently. We are 13,000 primary care physicians short nationally, and my understanding is that we are dropping 5,000 of those every five years.

John Young: So another 1000 a year, another 1000 a year shortage and primary care physicians have been great. Resources is kind of a little bit of the. Triage, you know, the, the on-ramp to everything serious. The primary care physician is kind of looking at your overall health and making sure they’re measuring all the right things to, to help guide.

John Young: They’re kind of, they’re kind of more the, your partner in health improvement and we’ve got a shortage, so what are people going to do? There’s luckily the one big, beautiful bill has allowed us access to direct, um, primary care virtually. Um, and. So in other words, concierge types of situations where I might be paying so much a month so I have access to a certain physician who’s private, um, is something that I can use my HSA for and it does not disqualify my coverage.

John Young: I do think the nose is under the tent with the one big beautiful bill. The nose being, can we decouple the HSA from the high deductible, the qualified high deductible standard that the IRS put forth in the, um, since the very beginning, meaning you have to have a certain plan that doesn’t cover anything.

John Young: The only safe, safe harbors that are availed today, our farm, our, our, uh, preventive care, preventive medication, and now direct primary care and virtual care as well. And. What I’m saying. And it’s an important point, is that the nose is under the tent. That’s allowing more and more and different iterations of plan designs to still be eligible to offer an HSA.

John Young: This is great news. I led an initiative a couple years ago. I got 60 employers to sign off that asked the health and human services to consider the decoupling or at least championing it. Decoupling means that I can have an HSA with any kind of plan design. I’d love to see that, uh, in the future, um, as well.

Yep.

John Young: The other thing that I think is gonna kind of stick its nose up, and we’ve, we’ve talked about this for years, there’s some great companies doing it, like healthcare Blue Book out of Nashville is healthcare price and quality transparency. And making it in such a way that people actually go to it and use it and take advantage of it to save money.

John Young: Maybe we can incent people to be careful about these types of, um, of where they go and get their care. Maybe we give them a budget in our plan designs going forward, meaning we’ll pay up to $10,000 for this. But if you come in at $8,000. We’ll find some way to give you that in a credit. You know, there’s, there’s all sorts of issues to what I’m suggesting, but the idea is not just an incentive to save money, but a a way for people to win if they choose the right provider.

John Young: I know that health plans are looking at models to eliminate all copayments, all cost sharing. If they see a certain kind of network of physician, great, great. There’s some great ideas out there, but I do see decoupling as being a big opportunity and some way to get us more connected, um, to primary care, um, whether it’s direct, primary care, or virtual.

Jon Meyer: You know what, one thing you mentioned there that’s interesting to me is I’m seeing more and more people with decent account balances, but this scarcity mentality that people seem to have means they wanna keep saving. Sure. But there becomes a point where they should start spending too. And I find that interesting.

Jon Meyer: ’cause as, as we know, if you die with your HSA and pass it on to your children, your children actually are taxed.

John Young: Your children are, your spouse is not,

Jon Meyer: your spouse is not, but your children are. And so part of the answer is trying to get people to realize, yes, it’s good to save and save and save, but there is a point where you should start spending.

Jon Meyer: And I wonder if we don’t maybe go down the path a little bit, you know, it’s down the road maybe, but where we start educating people on how to spend, how to, how to feel the freedom of, this is the life I want, instead of this scarcity mentality of I never have enough. I never have enough. So. It’s kind of the human behavior thing that I always think about.

John Young: Let’s go back to the 401k comment you made. What did we do in that design to get people to participate? We offered them a match. You put money in, we’ll match your money. Most HSA designs our, here’s your deductible, it’s $2,000 and we’re gonna give you $500 towards that. We’re gonna give it to you all upfront.

John Young: Now, so your real deductible is 1500 because we’ve given you 500 towards that. I think a better way is to say, I’ll give you a dollar for, I’ll put a dollar in for every dollar you put in, and I’ll give you it up to $600. So the employee is thinking, oh, this is better than what I had before. I can get up to 600, but they themselves have to put in 600.

John Young: Now I’m gonna, I’m gonna pull the rug out a little bit here. As much as we’re in a go-go happy like time with HSA growth, I mean, it grew 16% in assets over this last just year over year for the mid-year report, 16%. That’s awesome. And a lot of that’s has to do with market renewal. But if I put in a dollar, I’m.

John Young: My employer is saving on my social security tax. I’m saving on my Social security Tax Matching is a super great way to get people to, to contribute. Where I said I was gonna pull the rug out, it’s the fact is half of HSAs, half of them, half of the 40 million have less than $500 in them. So I just, you know, to me, I just think, God, there’s, there’s a way to get into the lives of people, to show them that they can, they can make, you know, they can use these more appropriately, you know, and that they’re giving money to themselves and they’re giving themselves tax free money.

John Young: That’s an amazing component to this. And I think another thing that people don’t understand. Is that they can, like a 401k, they can make changes on the fly. If I decide I wanna put 7% of my income into my 401k tomorrow, I can. Same thing with an HSA, I can contact my human resource department and say, you know what?

John Young: I signed up for 2000. I wanna sign up for 4,000. So, um. Yeah, that’s what I wanted to say. We need to, we need to get people to start contributing to these things, not just investing.

Jon Meyer: I’m just curious before we wrap it up, what, do you have any stats on how many actually have maybe more than a hundred thousand in these things? Oh yeah. I’d be curious about that too, because we always talk about what people aren’t doing, but there’s some people that are super savers.

John Young: That’s true. 6 million accounts have north of $5,000 in them. I happen to have led a partnership that one of the individuals had over a million dollars in their HSA.

Jon Meyer: It becomes an investment question, right?

John Young: Oh yeah. 61% of these accounts are all affiliated with an employer and all of them affiliated with employer. If you took all of those HSAs, that’s a hundred. 8 billion of the 159 billion in assets. So employers seem to do a better job of getting people to contribute and why not?

John Young: They’ve got the payroll. The payroll is where the tax savings are, are the easiest now that I’m a single, um, like I have my own company. I can contribute up to the statutory max plus a thousand ’cause I’m over the age of 55. I can put that in all the way up until tax day of the following year to get that tax saved.

John Young: That top line reduction on federal and state here in Minnesota. Um, I just miss out on the Social Security tax save, which is 7.65% for me and also for the employer, the employer. Has the, I think the instrument that gets people to contribute, which is payroll, you know?

Jon Meyer: Yep. Let’s close with the question I always like to ask, which is what haven’t I asked?

John Young: How about this? For anyone listening, where do we go, uh, if we’ve got questions on, on our HSA? If you’re an employee of a company that offers your HSA. Your HR department might have resources to get you better educated on this. They might send you to the HSA company that they have contracted with. Lean into those resources.

John Young: Use ai, ask specific questions. How much money am I going to need at age 65 when I retire? Just for healthcare? Fidelity does a great job doing this. Um. Fidelity, by the way, is the largest HSA company when it comes to assets. Not so much accounts, but assets probably because they come from the investment, uh, piece.

John Young: The top five. By the way, the top five vendors that do this make up 75% of all the total assets. Which is huge, but I would just lean into every resource that you can, um, find consultants like me if you, um, want to learn more. There’s all sorts of resources out there on the, on the web, and I can also share with you those resources that you can post as part of this podcast.

John Young: But there’s, um, the more you understand. The less complex it is, the better you’re gonna use it. The longer you’re in it, the more you’re going to save. The more you get your legs, the more you’re gonna know how to interact with the healthcare community. You will save money. And I think the one thing that you didn’t ask me that I always like to say when I’m talking about consumerism and healthcare is this, who pays for healthcare?

John Young: It’s the person staring back at you in the mirror. This should have an effect of you wanting to get healthier, eat better, exercise more, manage your money better. This, it’s all connected. It’s not just a simple little debit card that comes along with your health plan. This is the beginning of you taking control of your health and of your wealth.

Jon Meyer: Thanks, John. I’ve known you a long time so I know that you’re passionate about this and what I really appreciate is how you kind of explain the intentionality you have to have with your health and with using HSAs. But they’re a powerful tool and I don’t think enough people know about ’em. So I really appreciate you coming on.

Jon Meyer: If you guys want more information about this or any other topic, feel free to visit us at BGM360.com and thanks for joining us.

Outro: Thank you for tuning into Mastering the 360 Mindset. If you enjoy today’s episode, help us spread the word, share it with your friends and family, and anyone you think you could benefit, and be sure to subscribe so you never miss an episode.

 

---

Want to learn more about working with BGM? Visit BGM360.com today. Until next time, keep mastering your 360 mindset. The information covered represents the views and opinions of the guest and does not necessarily represent the views or opinions of Jon Meyer or BGM. The content has been made available for informational and educational purposes only.

The content is not intended to be a substitute for professional investing advice. Always seek the advice of your financial advisor or other qualified financial service provider with any questions you may have regarding your investment planning.