For the Thinking Employee, No-Brainer Health Care Is Passé - New York Times

Are such plans bad news for employees? When you consider that 73 percent of Americans incur less than $500 a year in medical expenses, it pays to figure out if you can save some money with lower-premium, high-deductible plans buttressed by a tax-advantaged health savings account.

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TAXES Not only do you get to save for retirement in a health savings account, doing so also lowers your tax payment. "It's another avenue for tax deferral and wealth accumulation," said Dan Kelly, manager of health savings accounts services at U.S. Bank, which sells the plans to employers and individuals. For example, when you put $2,500 in the account and you face an income tax rate of 25 percent, you have immediately saved $625. The account gives you tax advantages every which way - you put in pretax dollars, it compounds free of taxes, and the accumulation is tax-free when you take it out to pay for medical expenses.

"You get the trifecta," says Dan Perrin, publisher of HSA Insider (www.hsainsider.com), an insurance industry information Web site that includes information on numerous insurers' fees and rates of return. The key is to contribute an amount equal to the deductible. One of the biggest mistakes an employee makes is picking a plan with a low deductible. But pick a plan that has 100 percent coverage above that deductible.

OTHER ACCOUNTS In a perfect world, that one where money grows on trees, you would want to contribute to all the alphanumeric savings vehicles: the health savings account, 401(k) and individual retirement account. If you can't finance all of them, you might consider putting money into the health savings account first because it is the most tax advantaged.

Indeed, if in retirement your bills are small, you can use it for anything else and pay regular income taxes on it as you would a disbursement from your 401(k) account.