Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Re: HSA insurance
Old 02-19-2005, 08:14 PM   #21
Thinks s/he gets paid by the post
wabmester's Avatar
 
Join Date: Dec 2003
Posts: 4,459
Re: HSA insurance

nwsteve, if "nw" stands for Pacific Northwest, then check out KPS. They have two HSA options, and we're just switching over to their lower deductible option.

In my case, even if I don't put a penny in an HSA account, and I'm out of pocket the entire deductible amount, the policy still works out cheaper than my old individual policy (due to outrageous rate hikes for the third year in a row).
__________________

__________________
wabmester is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Re: HSA insurance
Old 02-19-2005, 08:31 PM   #22
Thinks s/he gets paid by the post
 
Join Date: Jun 2004
Location: E. Wash
Posts: 1,058
Re: HSA insurance

Quote:
nwsteve, if "nw" stands for Pacific Northwest, then check out KPS. * They have two HSA options, and we're just switching over to their lower deductible option.

In my case, even if I don't put a penny in an HSA account, and I'm out of pocket the entire deductible amount, the policy still works out cheaper than my old individual policy (due to outrageous rate hikes for the third year in a row).
Wab,
Yes I am in the Seattle area. Need some help with who "KPS" is. Maybe it is too late in the evening or the wine ;-) , but it is not ringing a bell.
I am using Regence now and paying about $450 for an individual policy with a 500 deductible and pretty good coverage for well health.
Nwsteve
__________________

__________________
nwsteve is online now   Reply With Quote
Re: HSA insurance
Old 02-19-2005, 08:40 PM   #23
Thinks s/he gets paid by the post
wabmester's Avatar
 
Join Date: Dec 2003
Posts: 4,459
Re: HSA insurance

nwsteve, I dumped Regence for these guys and never looked back:

http://www.kpshealthplans.com/
__________________
wabmester is offline   Reply With Quote
Re: HSA insurance
Old 03-06-2005, 06:59 PM   #24
Thinks s/he gets paid by the post
wabmester's Avatar
 
Join Date: Dec 2003
Posts: 4,459
Re: HSA insurance

I'm about to pull the trigger on an HSA. I haven't researched all of the options extensively, but the options I have looked at pass my smell test.

We are a three-member family. Last year, we had individual PPO coverage at a cost of $468 per month. The coverage was fine, and I found the costs reasonable. This year, our insurer restructured their plans, and the monthly cost went up to $600+. Still reasonable, I suppose, but whenever some service goes up by 30%, I go shopping.

So, I switched to a high-deductible policy. The deductible is now $3200 per year for the entire family, and the rate is about $300/month. Coverage is basically the same as the old policy, but maternity is no longer covered, which is fine with me

If we were out the entire deductible amount, our costs would be about $6800/year, which is less than just a $600/mo premium expense would be. So, the high-deductible policy is a no-brainer.

Now we are eligible to put $3200 per year into the equivalent of an tax-deferred IRA (with penalty-free withdrawls allowed for medical expenses). I think we'll be going with HSABank. They offer a pretty standard brokerage account, and reasonable fees.

http://www.hsabank.com/openhsa/rates_fees.asp

A lot of the posts here have been anti-HSA, but for our case, it seems like a nice fit. Am I missing something obvious?
__________________
wabmester is offline   Reply With Quote
Re: HSA insurance
Old 03-07-2005, 06:21 AM   #25
Recycles dryer sheets
 
Join Date: Aug 2004
Posts: 151
Re: HSA insurance

Quote:
Now we are eligible to put $3200 per year into the equivalent of an tax-deferred IRA (with penalty-free withdrawls allowed for medical expenses). * *I think we'll be going with HSABank. * They offer a pretty standard brokerage account, and reasonable fees.

http://www.hsabank.com/openhsa/rates_fees.asp

A lot of the posts here have been anti-HSA, but for our case, it seems like a nice fit. * *Am I missing something obvious?
I would like to use an HSA especially since I have almost no medical expenses - it would be a good way to say for retirement medical expenses. I can't seem to find a place that won't eat me alive with fees.

The high-deductible plan from my work has a $1000 deductible. *If I went with the place you linked:

1,000 deposit
-18 enrollment fee
+16.10 interest earned for one year
-27.00 in monthly maintenance fees
I'd end up with 971.10 at the end of the year just for the privledge of having an account with them. )Not to mention what inflation would do this account over time.)

If I wanted to try and earn more money than their interest rates by investing the money thru their brokerage account, I'd have to pay another $15 fee for that. $1.50 for every ATM withdrawl/checkcard purchase or $4 for every withdrawl.

Unfortunately, I can't seem to find a place with a better fee structure. Maybe with your higher deductible (more money you would be putting in) this would make more sense for you in your situation.
__________________
Cal is offline   Reply With Quote
Re: HSA insurance
Old 03-07-2005, 07:00 AM   #26
Moderator Emeritus
laurence's Avatar
 
Join Date: Feb 2005
Location: San Diego
Posts: 5,234
Re: HSA insurance

This is an exciting thread for me! In all my retirement calculations, it was health care that worried me the most, since the cost seems to grow by leaps and bounds year after year. I'm curious, I may have missed it in this thread, but are premiums allowed to be paid out of this account?
__________________
laurence is offline   Reply With Quote
Re: HSA insurance
Old 03-07-2005, 08:26 AM   #27
Thinks s/he gets paid by the post
wabmester's Avatar
 
Join Date: Dec 2003
Posts: 4,459
Re: HSA insurance

Quote:
I'd end up with 971.10 at the end of the year just for the privledge of having an account with them. )Not to mention what inflation would do this account over time.)
Right. I realize that if you were only to deposit the min, and only do it for one year, and choose the lowest yielding option, then you might lose money.

However, I plan to contribute $3200 a year for the next 20 years or so, and invest the same way I would "real" money, so I hope to do better than your example
__________________
wabmester is offline   Reply With Quote
Re: HSA insurance
Old 03-07-2005, 08:41 AM   #28
Recycles dryer sheets
 
Join Date: Aug 2004
Posts: 151
Re: HSA insurance

Quote:
This is an exciting thread for me! *In all my retirement calculations, it was health care that worried me the most, since the cost seems to grow by leaps and bounds year after year. *I'm curious, I may have missed it in this thread, but are premiums allowed to be paid out of this account?
Before retirement, you cannot use the money to pay for your premiums - only for medical expenses (doctor visits, prescriptions, etc). After you are retired, you can use the money to pay your insurance premiums.
__________________
Cal is offline   Reply With Quote
Re: HSA insurance
Old 03-20-2005, 08:19 AM   #29
Confused about dryer sheets
 
Join Date: Mar 2005
Posts: 7
Re: HSA insurance

It seems to me that the way to use the HSA is to go with the highest deductible which would lower the premium. Since the deductible is an eligible expense to be paid out of the account, in effect, you are trading premium cost for deductible cost. In other words, you make the premiums deductible by "converting" them to be part of the higher deductible.

For example, I can get a high risk pool policy in texas as follows:

$500 deductible -- $ 878 per month.
$2500 deductible -- $ 441 per month.

By going with the $2500 deductible, I can use HSA tax deferred money to pay the $2000 extra deductible but save $5244 ((878-441) * 12) in premiums.



As far as insurance premiums go, here is what I found on another site:



Generally, health insurance premiums are not qualified medical expenses except for the following: qualified long-term care insurance, COBRA health care continuation coverage, and health care coverage while an individual is receiving unemployment compensation. In addition, for individuals over age 65, premiums for Medicare Part A or B, Medicare HMO, and the employee share of premiums for employer-sponsored health
insurance, including premiums for employer-sponsored retiree health insurance can be paid from an HSA. Premiums for Medigap policies are not qualified medical expenses.

__________________
Al is offline   Reply With Quote
Re: HSA insurance
Old 03-20-2005, 08:50 AM   #30
Confused about dryer sheets
 
Join Date: Jan 2004
Posts: 5
Re: HSA insurance

The HSA rules limit the amount of deductible. I have a $1500 deductible and $5500 out of pocket. I can't use HSA because my out of pocket is too high. The max is $5000. Dumb! I'm retired and buy individual insurance with a high deductible and can't use HSA. Go figure!
__________________
rose is offline   Reply With Quote
Re: HSA insurance
Old 03-22-2005, 06:55 PM   #31
Thinks s/he gets paid by the post
 
Join Date: Mar 2004
Posts: 1,318
Re: HSA insurance

Quote:
I


Generally, health insurance premiums are not qualified medical expenses except for the following: qualified long-term care insurance, COBRA health care continuation coverage, and health care coverage while an individual is receiving unemployment compensation. In addition, for individuals over age 65, premiums for Medicare Part A or B, Medicare HMO, and the employee share of premiums for employer-sponsored health
insurance, including premiums for employer-sponsored retiree health insurance can be paid from an HSA. Premiums for Medigap policies are not qualified medical expenses.
Al,

If my understanding is correct, the quote above applies to using a HSA to pay for the high deductible health insurance premiums -- it is basically not allowed except under the circumstances you mentioned.

But on a separate note, outside the HSA, people who have self-employment companies can now adjust gross income down by the amount of the health insurance premium, 100%. I have had an S-corp for years, so this seems like an easy one for me, but others might want to consider starting a company for this deduction alone.

My feeling is that this deduction should be available to everyone (it puts you on even footing with employed people whose employers deduct health insurance premiums) but in the meantime, it is one more reason to think about starting a self-employment company to earn a bit of income doing something fun and occasionally lucrative.
__________________
ER for 10 years; living off 4.3% of savings (and a few book royalties ;-)
ESRBob is offline   Reply With Quote
Re: HSA insurance
Old 03-22-2005, 07:40 PM   #32
Confused about dryer sheets
 
Join Date: Mar 2005
Posts: 7
Re: HSA insurance

Interesting idea.

If you have an S corporation or are self employed, are you limited in the size of your deduction to the amount of net profit you declare at tax time ?

For example if you report 10,000 dollars AGI on April 15th, 5,000 dollars earned income and the rest investment income, could you deduct say, 7,000 dollars in premiums ? Or would 5,000 be the limit ?

Do you even have to show a profit ?
__________________
Al is offline   Reply With Quote
Re: HSA insurance
Old 03-22-2005, 10:11 PM   #33
Thinks s/he gets paid by the post
 
Join Date: Jan 2004
Posts: 2,049
Re: HSA insurance

http://www.irs.gov/publications/p535/ch07.html#d0e5536

"Self-Employed Health Insurance Deduction

You may be able to deduct 100% of the amount paid for medical and dental insurance and qualified long-term care insurance for you, your spouse, and your dependents if you are one of the following.

* A self-employed individual with a net profit reported on Schedule C, C-EZ, or F."

__________________
eridanus is offline   Reply With Quote
Re: HSA insuranceIf you do not use a distribution
Old 03-22-2005, 10:15 PM   #34
Thinks s/he gets paid by the post
 
Join Date: Jan 2004
Posts: 2,049
Re: HSA insuranceIf you do not use a distribution

HSA withdrawals after 65:

http://www.irs.gov/publications/p969/ar02.html#d0e636

"Reporting Distributions on Your Return

How you report your distributions depends on whether or not you use the distribution for qualified medical expenses (defined earlier).

If you use a distribution from your HSA for qualified medical expenses, you do not pay tax on the distribution ....

If you do not use a distribution from your HSA for qualified medical expenses, you must pay tax on the distribution. ...

Exceptions. There is no additional tax on distributions made after the date you are disabled, reach age 65, or die."


Take that as you will.


*Usual disclaimer: I'm not a CPA or tax attorney. Don't believe everything you read on the net.
__________________
eridanus is offline   Reply With Quote
Re: HSA insurance
Old 03-23-2005, 03:51 AM   #35
Thinks s/he gets paid by the post
 
Join Date: Mar 2004
Posts: 1,318
Re: HSA insurance

Quote:
Interesting idea.

If you have an S corporation or are self employed, are you limited in the size of your deduction to the amount of net profit you declare at tax time ?

For example if you report 10,000 dollars AGI on April 15th, 5,000 dollars earned income and the rest investment income, could you deduct say, 7,000 dollars in premiums ? Or would 5,000 be the limit ?

Do you even have to show a profit ?

Al,
I should ask my accountant to be sure, but my gut is that unlike the schedule C self-employment company, the S-Corp (or LLC) can deduct health insurance premiums now just like any other expense, and be fully deductible even in years you don't make a profit. There needs to be a genuine attempt to make a profit, and at some point there needs to be a profit shown, but I don't think the bar is very high. it all seems to be a grey area as to how many years you can run losses before someone asks questions or disallows your S-Corp.

__________________

__________________
ER for 10 years; living off 4.3% of savings (and a few book royalties ;-)
ESRBob is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Interesting HSA Distribution Rule kramer Health and Early Retirement 28 05-10-2007 02:00 PM
HSA and copay insurance? veritasophia FIRE and Money 6 03-02-2007 08:59 PM
HSA Summary TromboneAl FIRE and Money 96 12-28-2006 08:28 PM
The book, The New Health Insurance Solution Martha FIRE and Money 20 05-15-2006 11:16 AM
Health Insurance with HSA Option TromboneAl Other topics 21 07-17-2005 09:20 PM

 

 
All times are GMT -6. The time now is 11:37 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.