With the high cost of health insurance, it is no surprise that many people have switched to high-deductible health insurance policies and are using a health savings account (HSA.) An HSA allows you to set aside pretax dollars to pay for medical expenses or deductibles. However, you must do some investigating before you select a company to hold your health savings account.

According to a recent article in the AARP Bulletin, many HSAs and flexible spending accounts (FSAs) are not insured. The depositors may not be protected in the event of a company’s fraud or bankruptcy. According to the article, most of the banking regulations that protect bank accounts were established before HSAs and FSAs were invented, so these types of accounts may not be covered by the banking rules.

In order to protect yourself, before you deposit any funds, make sure you have a clear picture of what will happen if your money is lost or stolen. You should also look for “pass through” accounts in which the HSA or FSA are held by a banking institution, which is insured by the FDIC.

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