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Re: HSA Summary
Old 02-01-2006, 08:15 AM   #21
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Re: HSA Summary

Quote:
Originally Posted by fireme
I'd also wonder how this will affect charges.* We all know that healthcare providers charge self-paying people much more than the negotiated fees the insurance companies pay.* I wonder if we will be able to continue getting the negotiated fees for things that we are now paying for ourselves out of the HSA.* I'd hope we would get negotiated fees for covered expenses, and it would be very cool if we could get negotiated fees for non-covered expenses as well.
My company offered a high-deductible (HSA) option for the first time this year. The plan works the same way as the other option (an HRA) in that the negotiated fees apply to all services you receive from doctors who are in the plan. You go to the doctor, the doctor sends the info to the insurance company, the negotiated fee for the service is applied, you are notified of the charge, the doctor bills you the negotiated fee, and you pay with your HSA funds.

I don't believe non-covered expenses have a negotiated fee since, by definition, the insurance plan doesn't cover them. You can only use HSA funds for non-covered expenses if they are considered qualified expenses by the IRS. What counts as qualified expenses is covered in one of the IRS publications. So things like over the counter cough medicine, which are not covered by most insurance plans, can't be paid for out of HSA funds either since they are non-qualified expenses under IRS rules.
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Re: HSA Summary
Old 02-01-2006, 08:41 AM   #22
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Re: HSA Summary

Bush didn't say much in the speech (http://www.npr.org/templates/story/s...toryId=5181905 see paragraph with text "health care")
but NPR http://www.npr.org/templates/story/s...toryId=5181934 also looked at

Quote:
Background materials provided by the White House
and said that

Quote:
The president's proposals would give HSAs -- already tax free -- even more tax advantages. It would allow individuals who buy their own insurance the ability to deduct premiums for the high deductible insurance that accompanies an HSA.
Quote:
The President will also propose tax credits for low-income Americans to buy insurance -- again, only insurance that goes with an HSA.
(some FIRE's are low-income Americans)
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Re: HSA Summary
Old 02-01-2006, 02:23 PM   #23
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Re: HSA Summary

What I liked (read in WSJ today) was his efforts to push for a national market for health insurance. As one living in the two 'worst' states for healthcare insurance (NY and NJ) I was intrigued to read that healthcare costs here are as much as 10x higher than in other states. The whole movement to make health insurance less of an employer-model and more portable like a 401k will help early retirees (along with plenty of others).

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Re: HSA Summary
Old 02-01-2006, 02:44 PM   #24
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Re: HSA Summary

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The president's proposals would give HSAs -- already tax free -- even more tax advantages. It would allow individuals who buy their own insurance the ability to deduct premiums for the high deductible insurance that accompanies an HSA.
If you have a small business cant you do this anyway? I thought that was one of the issues people brought up here to do in FIRE.
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Re: HSA Summary
Old 02-01-2006, 02:48 PM   #25
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Re: HSA Summary

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Originally Posted by maddythebeagle
If you have a small business cant you do this anyway? I thought that was one of the issues people brought up here to do in FIRE.
Yes, if you have self-employement income, your health insurance premiums are fully deductible.
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Re: HSA Summary
Old 02-01-2006, 10:13 PM   #26
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Re: HSA Summary

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Originally Posted by wab
Yes, if you have self-employement income, your health insurance premiums are fully deductible.
Another reason (at least for now) to have a little self-employment company. Trick is that the darn thing actually has to make enough income to start deducting these expenses, and if you're not careful it might start to feel like 'work' again! The other nice one is being able to contribute to a Roth or other IRA -- in that case it has to come from income (profit) that you pay self-employment tax on.
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Re: HSA Summary
Old 02-02-2006, 02:49 PM   #27
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Re: HSA Summary

I guess I have some reading to do. I thought HSA's were the one-year, use-it-or-lose-it accounts like DCRA's but for medical expenses. Apparently not.

Does getting an HSA affect whether or not one might be approved for individual health insurance coverage?
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Re: HSA Summary
Old 02-02-2006, 03:08 PM   #28
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Re: HSA Summary

You're thinking of MSA's.

Usually the HSA and the high deductible health plan are linked.
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Re: HSA Summary
Old 02-02-2006, 03:12 PM   #29
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Re: HSA Summary

Quote:
Originally Posted by BigMoneyJim
Does getting an HSA affect whether or not one might be approved for individual health insurance coverage?
No. The two are not related.

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Re: HSA Summary
Old 02-02-2006, 03:36 PM   #30
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Re: HSA Summary

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Originally Posted by (Cute Fuzzy Bunny)
Usually the HSA and the high deductible health plan are linked.
HSA's and high deductible health plans are always linked, and the amount of deductible must meet certain requirements for you to be eligible to set up an HSA. For 2006, a high deductible insurance plan is a health plan with a minimum deductible of $1050 for self-only coverage and $2,100 for family coverage. The maximum out-of-pocket expenses for allowed costs must be no more than $5,250 for self-only coverage and no more than $10,500 for family coverage.

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Re: HSA Summary
Old 02-02-2006, 03:42 PM   #31
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Re: HSA Summary

Quote:
Originally Posted by MileKing
So things like over the counter cough medicine, which are not covered by most insurance plans, can't be paid for out of HSA funds either since they are non-qualified expenses under IRS rules.
The IRS is really murkey on this. Non-prescription meds are not medical expenses in pub. 502, but it has the note that "this does not limit reimbursements of employer-sponsered health plans that reimburse the cost of both prescription and non-prescription medicines". And according to HSA bank, many over-the-counter remedies ARE reimburseable:

http://www.hsabank.com/hsainfo/eligi...l_expenses.asp

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Re: HSA Summary
Old 02-12-2006, 10:52 PM   #32
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Re: HSA Summary

FYI

http://www.irs.gov/irb/2003-38_IRB/ar08.html

"Self-insured medical reimbursement plans. This ruling holds that employer reimbursements of amounts paid by an employee to purchase nonprescription medicines and drugs are excludable from gross income under section 105(b) of the Code. However, amounts paid by an employee for dietary supplements that are merely beneficial to the general health of the employee or the employee's spouse or dependents are not reimbursable or excludable from gross income under section 105(b). Rev. Rul. 2003-58 distinquished."

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Re: HSA Summary
Old 09-26-2006, 12:35 PM   #33
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Re: HSA Summary

I just want to make sure I understand correctly what I just read.

When I decide to retire I can plan on choosing an high-deductible health insurance policy combined with a HSA account to cover normal medical costs
that I would incur. This would replace my existing insurance now provided
by my employer as I would no longer be eligible for their insurance as they
do not offer Cobra.

If I were to become unemployed for any reason or re-employed by an
employer who doesn't offer insurance or become self-employed, I would
be able to start the HDHI and HSA at that time as well and have the
comfort of knowing that my normal medical costs incurred wouldn't kill
my retirement fund.

Am I understanding this? It sounds too easy.
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Re: HSA Summary
Old 09-26-2006, 12:54 PM   #34
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Re: HSA Summary

I am not sure what sounds easy.

Are you sure you are not eligible for at least 18 months of COBRA?* Only fairly small employers are not required to provide COBRA coverage.* Also, even if they don't have to give it under federal law, state law sometimes requires a COBRA like benefit.

To get an HSA you have to get an HSA qualified plan.*

FSA qualified plan or not, individual health insurance can be expensive or impossible for some people to purchase if their health isn't about perfect. But, it can be a great deal if you are in good health. A chance to sock away money for future medical expenses.
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Re: HSA Summary
Old 09-26-2006, 12:55 PM   #35
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Re: HSA Summary

Quote:
Originally Posted by scrubradio

Am I understanding this? It sounds too easy.
Yes.... and yes. As usual, the devil is in the details.

What Martha said.

Age, current health status and other esoteric fine points must be taken into consideration. Insurance rules vary by state and determine the premiums you will pay for your HDHI, assuming you can afford it or get it (not available in all states). Rule of thumb: if you have preexisting conditions, the policy will exclude them or, if the state requires no exclusions, the policy premiums will be very expensive.

You might want to take a look at healthinsuranceinfo.net which provides a very good consumer guide for the peculiarities of health insurance in each state.

Good luck.

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Re: HSA Summary
Old 09-26-2006, 01:35 PM   #36
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Re: HSA Summary

Is there an age at which you can not qualify for an HSA?
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Re: HSA Summary
Old 09-26-2006, 01:40 PM   #37
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Re: HSA Summary

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Originally Posted by runnerr
Is there an age at which you can not qualify for an HSA?
I don't think you are HSA eligible once you are 65 and qualify for Medicare.

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Re: HSA Summary
Old 09-26-2006, 01:44 PM   #38
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Re: HSA Summary

Here is a good summary from the treasury department on HSAs:

http://www.ustreas.gov/offices/publi...HSA%20rules%22
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Re: HSA Summary
Old 09-26-2006, 07:26 PM   #39
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Re: HSA Summary

I'll consider an HSA when one is offered by Vanguard or some other low-cost company (though I can't think of one at the moment ) that is not out to screw me on fees and/or low rate of return for the privilege of keeping my money tied up.
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Re: HSA Summary
Old 09-27-2006, 12:01 AM   #40
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Re: HSA Summary

I began to research costs of plans in my area.* Fortunately we have the
lowest rates in the state.* I considered cost of HDHI & HSA max funding
for the ages 54-64 after which medicaid/meticare kicks in and here is what
I came up with.

Total cost for the 10 year period: $60,500 ($26,000 HSA, $34,500 HDHI)

Monthly cost for first 5 years: $475 ($216 HSA, $259 HDHI)

Monthly cost for 2nd 5 years: $532 ($216 HSA, $316 HDHI)

Plan deductable: $2600

The coverage of the plan doesn't look much different from my health
plan I have at work now.* Same basic coverage in most areas.

In order to pay the premium and fund the HSA account without reducing my
overall investment portfolio, I think I would need $60-100k earning a return
of 6-10%.* Otherwise it would eat away at my principal investment.

Even if my numbers at this point are not entirely accurate or do not include
some possible costs, I like the fact that it was possible to work up a base
figure to think about.* It helps with goal setting and modeling how much
Each extra year of early retirement will cost.

Bottom line seems to be that $100k of investments recieving a return of 6%
would cover the medical side of early retirement and would only be necessary
until medicare/medicaid begin.* At that point I would only have to worry about
the copays for them and I may still have investments left over in HSA if my health
doesn't go south.

Am I anywhere near close?*

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