Why will they be paying out the nose? If it is costly to setup payroll deduction for this benefit then wouldn't that defeat the purpose of its positives? If it does cost then what numbers are we talking here? I am self employed and payroll deductions cost me nothing.
That was speculation on my part; I apologize for not making that clearer. I know it to be true amongst 401(k)s that smaller employers get worse deals from 401(k) administrators. That is due to the overhead of running a plan, which is spread over a smaller number of participants. For 401(k)s, either that cost is paid by the employer or the employee. I suspect the same situation to be true for HSA's, but perhaps they aren't as expensive to administrate as 401(k)s.
And the answer to your second question is both. Those are two benefits of the plan. You can pay for health expenses and then also grow the account. Now I'll be honest I am not sure how this plays out exactly. I have read some who initially went with HSBC and moved their money over to an investment account after it accumulated. Since this is a young account the bulk of the funds initially will be used to pay for medical and health expenses.
Do you have a HSA? What company do you have the account through? I appreciate your time invested in this conversation.
I know you *can* do either or both with an HSA; my question is, what do you intend to do?
I do have an HSA, in fact two. I had an HSA from a prior employer, which I recently rolled over from Chase to my credit union (for consolidation - one less login/password to keep track of). And I have one currently and contribute through payroll deduction to an administrator called "Health Equity". I don't use it much for current expenses, rather, I am trying to let it build up. I hope to retire early some day, and at that point having a tax-free account from which to pay health expenses (including insurance premiums) will be nice. Yet, the relatively low contribution limit means that it's slow to build up, so so far I haven't invested any of it.