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Old 11-16-2010, 03:36 PM   #41
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As a new retiree who just started individual insurance plan 4 months ago, I read with concern all these posts of high cost premiums. I currently have a $5500 deductible HSA plan. It only costs $72 a month. I am a MO resident and am 46 years old. How are the premiums so vastly different in the individual market? Or are they going to stick it to me next? If I had to pay some of the rates quoted by people here in this forum, I'm afraid my retirement would be short lived.
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Old 11-16-2010, 05:57 PM   #42
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My HDHP/HSA yearly premium (for me and DH) with megacorp went from $1530 per year to $1750. $3000 deductible, 80/20 after deductible met, $6,000 out-of-pocket max with megacorp kicking about $1100 into the HSA. Free preventative care. Other plans much more expensive. Literature stated employee healthcare premiums would be 25% of the total cost of the policy this year which accounts for virtually all of the increase.

I wanted to contribute the max amount ($6150) to my HSA this year but I was informed by HR my max amount is only about $4500. I thought there was only two HSA contribution levels (family and individual) but apparently that is not the case when it's an employer policy. Anyone ever heard of this limit?
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Old 11-16-2010, 06:05 PM   #43
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Originally Posted by dgoldenz View Post
Unless you're looking at the 60+ age range, individual market premiums are almost always lower than group.
So why does the 60+ age group pay less? I assume because they don't have as many claims but I never would have guessed that.
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Old 11-16-2010, 06:14 PM   #44
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Originally Posted by Buckeye View Post
My HDHP/HSA yearly premium (for me and DH) with megacorp went from $1530 per year to $1750. $3000 deductible, 80/20 after deductible met, $6,000 out-of-pocket max with megacorp kicking about $1100 into the HSA. Free preventative care. Other plans much more expensive. Literature stated employee healthcare premiums would be 25% of the total cost of the policy this year which accounts for virtually all of the increase.

I wanted to contribute the max amount ($6150) to my HSA this year but I was informed by HR my max amount is only about $4500. I thought there was only two HSA contribution levels (family and individual) but apparently that is not the case when it's an employer policy. Anyone ever heard of this limit?
Hi Buckeye. I suspect your HR may be misinformed.
Quote:
HSA holders can choose to save up to $3,050 for an individual and $6,150 for a family (HSA holders 55 and older get to save an extra $1,000 which means $4,050 for an individual and $7,150 for a family)
In the past the rules were a bit more complex, but now either your plan is HSA or not, and if so, you are eligible to contribute as stated above. You don't need your HR folks to even get involved in your HSA account - you can open with any one you choose.
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Old 11-16-2010, 06:52 PM   #45
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Hi Buckeye. I suspect your HR may be misinformed.
In the past the rules were a bit more complex, but now either your plan is HSA or not, and if so, you are eligible to contribute as stated above. You don't need your HR folks to even get involved in your HSA account - you can open with any one you choose.
I thought there was only two contribution levels (individual and family) for the HSA but our company literature/website has 3 levels which are individual, family, and employee and spouse/partner. The individual and family contribution amounts match the 2 levels I've seen everywhere but HR insists there is a third level ($4600) for employee and spouse/partner. I did not make HR provide me a citation but I need to. I calculated I could contribute another $1550 over their contribution plus what I am allowed to have taken out of my paycheck. I don't want to run afoul of the IRS and put too much in but I also don't want to miss the opportunity to max out my contribution.
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Old 11-16-2010, 08:50 PM   #46
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My employer subsidized retiree coverage went up only $4 as well. But they did raise the deductible and max out of pocket a bit too. Generally, I'm happy it wasn't much worse.

They did point out in the cover letter that retiree plans ARE NOT covered by the changes mandated in the recent healthcare legislation. I didn't know that.
I thought AARP was all for this bill? Looks like they dropped the ball ( or maybe they didn't know what was in the bill until after they passed it either?)!

-ERD50
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Old 11-17-2010, 08:01 AM   #47
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Originally Posted by Buckeye View Post
I thought there was only two contribution levels (individual and family) for the HSA but our company literature/website has 3 levels which are individual, family, and employee and spouse/partner. The individual and family contribution amounts match the 2 levels I've seen everywhere but HR insists there is a third level ($4600) for employee and spouse/partner. I did not make HR provide me a citation but I need to. I calculated I could contribute another $1550 over their contribution plus what I am allowed to have taken out of my paycheck. I don't want to run afoul of the IRS and put too much in but I also don't want to miss the opportunity to max out my contribution.
Your understanding of the contributions levels is correct. One for individuals ($3050) and one for families ($6150) with a $1000 additional for us gray hair folk. There is no other category as defined by Treasury rules. Their web-site is helpful.
Treasury HSA U.S. Treasury - Health Savings Accounts (HSAs)
Treasury HSA FAQs U.S. Treasury -HSA Frequently Asked Questions

Up 'till 2007 HSA contributions were variable and there were more rules and complexity. Perhaps your HR is just not updated. Here are the rule changes http://www.ustreas.gov/offices/public-affairs/hsa/pdf/n-08-52.pdf

Perhaps your HR is making an HSA contribution in your name as part of the health plan. (just speculating) Every HSA contribution needs to be reflected on IRS form 5498-SA and on your 1040, so they would need to provide one and those funds would have to be available to you.

The employee + partner contribution level needs to be referenced. If such a thing does exist would you mind posting back here? I am as perplexed as you.
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Old 11-17-2010, 08:06 AM   #48
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So why does the 60+ age group pay less? I assume because they don't have as many claims but I never would have guessed that.
The 60+ age bracket in a group plan is more than likely paying the rates of a 40-45 year old since most groups are based on average employee age or total claims experience, where the average overall is probably lower than your average 60-64 year old. If they were to compare their group premiums based on someone younger's age to what they would pay for individual market insurance at their current 60-64 age, the group would probably be cheaper unless they were in very good health.
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Old 11-17-2010, 09:28 AM   #49
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Perhaps your HR is making an HSA contribution in your name as part of the health plan. (just speculating) Every HSA contribution needs to be reflected on IRS form 5498-SA and on your 1040, so they would need to provide one and those funds would have to be available to you.

The employee + partner contribution level needs to be referenced. If such a thing does exist would you mind posting back here? I am as perplexed as you.
I am counting my employers contribution of about $1100 in the total to make $6150. Here is the original response I received from HR which leaves me $1550 under the $6150 cap after including both our contributions which will total $4600:

Your HSA contribution is capped at $4600 because you are on a employee and spouse/domestic partner plan, not a family plan. Family plans have a premium of $2,685.57, significantly higher than the employee and spouse/d.p. premium of $1,762.41. Because your current plan's premium is lower, the contribution amount to the HSA is also lower. This is regulated by the IRS, although they do not do a good job of explaining this on their website. They do regulate additional levels of coverage other than just individual and family, but given the uniqueness of these plans they don't specifically address it on their general website. The only way to increase your contribution amount is to upgrade to the larger family plan.
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Old 11-17-2010, 09:35 AM   #50
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Your HSA contribution is capped at $4600 because you are on a employee and spouse/domestic partner plan, not a family plan. Family plans have a premium of $2,685.57, significantly higher than the employee and spouse/d.p. premium of $1,762.41. Because your current plan's premium is lower, the contribution amount to the HSA is also lower. This is regulated by the IRS, although they do not do a good job of explaining this on their website. They do regulate additional levels of coverage other than just individual and family, but given the uniqueness of these plans they don't specifically address it on their general website. The only way to increase your contribution amount is to upgrade to the larger family plan.
Never heard of that before, but it sounds like your HR department did some checking on it. On an individual market plan, a husband/wife is considered a "family" and allowed to contribute the full family amount. I don't know why it would be capped at $4600 when each individual person on a separate policy can contribute $3150 and you have two people on a husband/wife plan.
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Old 11-17-2010, 10:32 AM   #51
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Buckeye, before 2007 HSA contribution amounts were limited to individual plan deductibles. This changed in 2007 (see the link in my earlier post) and contributions limits were established independent of specific plan characteristics. Since then, once a plan is qualified as HSA eligible and you meet the eligibility criteria (how long were you covered during the year), regardless of the deductible amounts, the yearly contribution limit is the same.

It still sounds like the limitation described to you is based on the pre-2007 contribution rules.

IRS form 8889 is used to calculate the eligible HSA contribution. See the form here http://www.irs.gov/pub/irs-pdf/f8889.pdf and the instructions here http://www.irs.gov/pub/irs-pdf/i8889.pdf They confirm the contribution limits as we have discussed: individuals @ $3050, families @ $6150. There is no mention of a third category and the only limitations are from less that a full year of coverage or part- year marriage.

I think your HR needs to link to specific instructions and forms or they are just misinformed.
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