For my health coverage I finally took the plunge into the new medical plan called Health Savings Account.Unlike FSA , you don't lose money if you have balance at the end of the year.You carry forward your money just like a 401k.The contributions are tax deductible, the growth in it is not taxed and future withdrawals are also tax-free as long as they are for qualified medical expenses(defined by IRS).
You can also invest the money in mutual funds etc, though not every HSA accounts allow you to do it.
The other advantage is for individual  who are in the high income bracket can continue to contribute tax-free and not use the money during the current year, instead they can use the money from their regular accounts etc so that they can get the benefit of taxes in the current year and at the same time let their money grow tax-free and withdraw it in the future tax-free.
You can read more about HSA accounts @ http://en.wikipedia.org/wiki/Health_savings_account
Updated
I recently found out that for California HSA contributions are not tax deductible for state taxes.Read more @ http://www.aapsonline.org/msas/hsas.pdf

posted at: 15:02 | category: /personalfinance | permanent link to this entry