As healthcare costs continue to rise, there’s one tool that offers consumers and business owners in Colorado real control over their healthcare expenses: the Health Savings Account (HSA).
Colorado Health Savings Accounts
It’s more than just a savings account for medical expenses—it’s a powerful tax-advantaged strategic financial asset that can bring financial benefits both today and well into retirement.
If you’re not already contributing to an HSA, this is your opportunity to learn how cash can become king in healthcare and why this tax-advantaged account is a must-have for anyone looking to take charge of their health and wealth.
Talk to a Personal Benefits Manager About Switching to an HSA
Cash Is King!
In today’s healthcare system, insurance is nice, but cash is still king.
Here’s why:
With traditional managed care insurance products like HMOs and PPOs, insurance companies routinely limit you to getting all non-emergency care from their approved networks of low-cost providers.
That’s not always in your best interest as a patient. Most people want to see the best doctors, not the ones who happen to offer the carrier the cheapest prices in exchange for their referrals.
Likewise, insurance companies often try to save money by having bureaucrats and bean counters––not your doctor––decline your doctors’ medically recommended treatments. Or they’ll delay the care you need by imposing preauthorization requirements or demanding you try lower-cost remedies first, despite your doctors’ recommendation after examining you, personally.
If you rely entirely on your insurance company, you don’t have much power to fight back. The insurance companies have all the power. You might win an appeal. But that could take weeks or months. And you need medical care now!
That’s when having money in a Health Savings Account (HSA) can be a literal lifesaver. Your HSA empowers you to make these decisions on your own terms. You can take back control of your healthcare, and make your own medical decisions with your doctor. Not an accountant in an insurance company’s accounts payable department.
Here are some ways insurance carriers can harm you as a patient, and how HSAs can help you access more timely and better care.
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What are Narrow Networks?
Narrow networks are insurance plans that limit your access to a select group of healthcare providers. The reason this happens is that doctors and other providers are willing to negotiate discounts with insurance companies in exchange for a steady stream of referrals.
The narrower the network, the more significant the stream of referrals will be for those few doctors still in it. So there’s a natural incentive for networks to become narrower and narrower, since insurance companies get a pricing advantage from narrow networks.
HMOs, then, tend to have relatively low premiums, all things being equal.
Those low premiums are nice… until you need care. Then you’ll often find the network doesn’t have a specialist you need within reasonable driving distance. Or one of the few primary care doctors in the network in your town can’t give you an appointment until next month.
If you have some cash in your bank account, or you have a health savings account, that’s not a problem: you can go see the provider you need, and not have to worry about insurance company authorizations or narrow care networks.
And with an HSA, the dollars you spend for qualified medical and dental expenses are tax free.
Benefits of Colorado HSAs and Cash
Having cash available through a Health Savings Account (HSA) can significantly enhance your healthcare freedom in several different ways:
- Provider Choice. With HSA funds, you can choose any provider, bypassing network restrictions.
- Quality of Care. You can seek the best care available, rather than being limited to in-network options.
- Continuity of Care. Maintain relationships with preferred doctors who may not be in your network. This is extremely important for patients with complex medical needs. It can be extremely frustrating to have to change providers and start from square one explaining your entire medical history to the new doctor, including all the things you’ve tried before that didn’t work.
- Specialized Treatment. Access specialists for complex conditions without incurring out-of-network fees or delays.
- Negotiating Power. Paying cash often gives you leverage to negotiate better rates directly with providers. Many hospitals and other providers offer discounted pricing to those who pay in cash. This can be a huge benefit, especially if you have a high insurance deductible and you don’t normally meet your deductible: Any cash discounts you can negotiate directly benefit you, dollar for dollar.
- Transparency. Cash payments can lead to clearer and more transparent pricing, no “surprise” medical bills, and allow you to make more informed decisions about your healthcare spending.
Learn More: How Much Can an HSA Save?
Maximizing Your Colorado HSA Benefits
Here’s how to get the most value out of your HSA.
- Contribute the maximum allowed to your HSA. As of 2024, you can contribute up to $4,150 to your HSA if you’re single, or $8,300 if you have a family HDHP. You have until April 15th 2025 to make your 2024 contributions. For 2025, you can contribute up to $4,300 for single plans, or $8,550 for families.
- Invest some or all of HSA funds for growth, using self-directed investing. There are several banks that will allow you to invest HSA funds into vehicles like exchange traded funds (ETFs) that provide the potential for long-term growth.
- Keep records of healthcare expenses.
- Educate yourself on costs and quality metrics.
- Take advantage of price transparency laws and shop around for the best healthcare value. For example, you can use websites like www.healthcarebluebook.com to compare providers, prices, and quality of care.
The Colorado HSA: A Powerful Retirement Asset
Beyond helping with your current healthcare needs, an HSA is one of the best tools for long-term financial health. Often overlooked for its powerful benefits for retirees, an HSA represents an asset class on its own, and a very useful component to your retirement portfolio.
Any HSA funds you don’t need for healthcare become available for retirement income beginning at age 65. You just have to pay income taxes on any amounts you withdraw. But withdrawals for qualified medical expenses are still tax free. And you can even use tax-free dollars from your HSA to pay for long term care insurance premiums as well.
Here’s why an HSA is more than just a medical savings account:
Tax-Free Spending on Healthcare in Retirement
Unlike a standard savings or retirement account, where you pay taxes on withdrawals, an HSA allows you to spend tax-free on qualified healthcare expenses.
This is a massive advantage when planning for retirement, as healthcare costs tend to increase with age. Imagine having a dedicated pool of money that you can tap into, without worrying about taxes, to cover medical expenses like doctor visits, prescription drugs, dental work, and even long-term care.
The HSA Triple-Tax Advantage
What sets an HSA apart from ordinary savings accounts, or even other retirement accounts, is its triple tax advantage:
- Contributions are tax-deductible;
- growth is tax-free, and;
- withdrawals for qualified medical expenses are also tax-free.
This is more favorable than a typical savings account or even other retirement vehicles like a 401(k) or IRA, where all withdrawals are taxed, even for medical expenses.
Furthermore, unlike these tax-deferred retirement accounts, HSAs are not subject to required minimum distributions in retirement. You can allow your HSA savings to compound, tax-free, as long as you live.
In Colorado, where healthcare costs can be high, this triple tax advantage can lead to significant savings over time. It’s not just about saving for a rainy day—it’s about building a strong financial foundation that can support you in your retirement years.
HSAs for Employers – Sponsor a Meaningful Employee Benefit
For Colorado business owners, offering an HSA is one of the smartest moves you can make to attract and retain top talent.
It’s an employee benefit that speaks volumes about your commitment to their health and financial well-being. Here’s why incorporating an HSA into your benefits package is a win-win for both employers and employees:
Tax Advantages of Colorado Health Savings Accounts for Employers
- Tax Deductibility of Contributions
- Employer contributions to employee HSAs are 100% tax-deductible, reducing the company’s taxable income and overall tax liability.
- Payroll Tax Exemption
- Potential for Lower Health Insurance Premiums
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- HSAs must be paired with high-deductible health plans (HDHPs). These plans typically offer lower premiums compared to other comparable plans with lower deductibles, all other things being equal. This creates immediate savings for the company, which can be channeled back into the company or used to contribute to employee HSAs.
- This can lead to reduced health insurance costs for the employer, and more purchasing power for employees.
- When employees use their HSAs to pay for deductibles, copays, and other expenses, it reduces healthcare utilization for your group plan. This helps reduce premium increases in future years, since healthcare utilization and claims experience are two of the most significant drivers of group health insurance premiums.
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By offering HSAs, you’re not just providing a valuable benefit to your employees; you’re also implementing a smart tax strategy that can improve your company’s financial health. It’s a win-win for everyone involved.
Tax Advantages of Colorado Health Savings Accounts for Employees
Health Savings Accounts (HSAs) provide employees with significant tax benefits, encouraging them to save for healthcare expenses while reducing their tax burden. These benefits include:
- Tax-Deductible Contributions:
- Employee contributions to HSAs are tax-deductible, lowering their taxable income.
- In 2025, contribution limits are $4,300 for individuals and $8,550 for families.
- Individuals 55 and older can contribute an additional $1,000 catch-up amount.
- The deadline for 2025 contributions is April 15th, 2026.
- Tax-Free Growth:
- Funds within an HSA grow tax-free, allowing savings to accumulate over time without incurring tax liabilities.
- Tax-Free Withdrawals:
- Withdrawals for qualified medical expenses are tax-free, providing employees with a valuable resource to manage healthcare costs without additional tax burdens.
These triple tax advantages make HSAs an attractive option for employees seeking to save for both current and future healthcare needs. By offering HSAs, businesses can empower their employees to take control of their healthcare finances and make informed decisions about their health and well-being.
Colorado HSAs: A Must for Independent Freelancers and Gig Workers
If you’re a freelancer, independent contractor, or gig worker in Colorado, contributing to an HSA should be a top priority.
Unlike traditional employees, you may not have access to a pension or employer-sponsored pension plans, such as 401(k)s, SEP IRAs, and SIMPLE IRAs. This makes contributing the maximum possible to an HSA valuable for your future financial security.
With an HSA, you kill two birds with one stone: You are prefunding healthcare expenses with tax-free dollars, and you are also building a foundation for a long-term, tax-advantaged vehicle for retirement income.
No Pension? No Problem! (Start a Colorado HSA)
For many freelancers, gig workers, and independent artisans, artists, and craftsmen, retirement planning is often overlooked in the pursuit of immediate income, but setting up a Health Savings Account (HSA) today can pay off big in the future.
Every dollar contributed grows tax-free and can be used to cover healthcare costs in retirement—a significant benefit when you don’t have a company-sponsored pension or 401(k) to fall back on. When you’re working for yourself, it can be tempting to focus solely on building your business, but contributing to an HSA, even in small amounts, can build a valuable financial safety net.
Over time, even modest contributions can grow into a substantial balance, giving you peace of mind knowing that future healthcare costs won’t drain your personal savings. For freelancers without a pension, an HSA can be a powerful tool for securing financial stability in retirement.
Start Contributing Today: Build a Big HSA Balance for Tomorrow
If you want a substantial HSA balance in the future, the key is to start contributing now. The earlier you begin, the more time your contributions have to grow, thanks to the power of compounding. Consider setting a goal for regular contributions, whether monthly or annually, to maximize your HSA’s growth potential.
Annual Contribution Limits
In 2024, the annual contribution limits for HSAs are $4,150 for individuals and $8,300 for families.
If you’re over 55, you can contribute an additional $1,000 as a “catch-up” contribution, allowing you to save even more. By contributing the maximum amount each year, you’re building a robust financial cushion that can cover healthcare expenses and safeguard your retirement funds.
Take Advantage of Employer Contributions
If your employer offers an HSA, take full advantage of their contributions.
It’s essentially free money that grows tax-free and can be used to pay for your future medical needs tax-free as well. Even if you’re not maxing out your contributions, employer funding can help you build a solid HSA balance over time.
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Conclusion: Empower Your Healthcare and Financial Future with a Colorado HSA
For Colorado residents across various employment situations, an HSA offers a powerful combination of healthcare control and financial advantages.
By contributing to an HSA, you’re not just saving for healthcare expenses. You’re building a long-term, tax-advantaged nest egg for retirement. Whether you’re a business owner seeking to attract top talent, a freelancer looking for tax-efficient savings, or simply someone who wants more control over their healthcare, an HSA is a smart choice.
Don’t wait to unlock these benefits. Contact your Personal Benefits Manager today and take the first step towards a healthier, wealthier future.
For Further Reading: What Are the HSA and HDHP Limits for 2025|HSAs: A Powerful But Underrated Retirement Asset|How to Get the Most Out of Your HSA Account
Misty Berryman is a Personal Benefits Manager at ColoHealth. Her aim is to help you make smart and informed healthcare coverage decisions that will fit your needs and budget. Read more about Misty on her Bio page.
