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Old 11-23-2013, 01:57 PM   #21
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... For couples only over age 50 it makes sense to have separate HSA policies anyway, because that way each is eligible for a catch-up contribution.
You meant over 55, right? (Actually, it's 55+.)
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Old 11-23-2013, 01:57 PM   #22
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Sorry, I gave the wrong deduction amount for 2013--It is $3250 for 2013 and $3300 for 2014 EACH plus 1000 EACH if you are over 55. Sorry, hard to keep up!

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Old 11-23-2013, 02:47 PM   #23
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Originally Posted by Birdie Num Nums View Post
You meant over 55, right? (Actually, it's 55+.)
Yes - that is what he means.
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Old 11-23-2013, 02:51 PM   #24
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Sorry, I gave the wrong deduction amount for 2013--It is $3250 for 2013 and $3300 for 2014 EACH plus 1000 EACH if you are over 55. Sorry, hard to keep up!

Jo Ann
I think a couple filing jointly is limited to $6250/2 = $3325 plus $1000 each catch up contribution for 2014. That niggling little $50 difference is because the family limit is applied to a two individual household even if their health plans and HSAs are independent.
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Old 11-23-2013, 03:14 PM   #25
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Originally Posted by Birdie Num Nums View Post
You meant over 55, right? (Actually, it's 55+.)
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Yes - that is what he means.
Right Both ages are memories for us, fading quickly, so it's hard to tell the difference sometimes.
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Old 11-23-2013, 06:21 PM   #26
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Does anyone have the exact definition of what a "HSA qualified HDHP" is ? the best I can find is this
I believe another requirement for HSA plans is that there can be no payments made by the insurance company (except for certain things like preventive care) until the deductibles are paid. I was also was curious as to why one of my low cost Bronze plans was not HSA eligible since it seemed to meet all of the HSA requirements. When I looked at the plans details on the healthcare providers web site there was a note (not mentioned on ACA) that the deductible is waived for the first primary care office visit. This was the only thing that I could find that might explain why it is listed as not HSA eligible.
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Old 11-23-2013, 08:49 PM   #27
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Right before Obamacare whenI retired I had a chance to stay on group plan of $500 premium with $1k deductible and prescription co pays. I declined and went on my own with an individual plan of $5500 with HSA and $72 monthly premium. Four years later, still with no health issues or prescriptions, I have saved almost $25,000 by forgoing the group plan. Obamacare premium costs have thrown a wrench into this, but as long as I stay healthy until 65, with the HSA deduction I will still come out ahead. If the health issues ever kick in before Medicare, I may live to regret my decision.
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Old 11-24-2013, 08:06 AM   #28
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I believe this is the original IRS document on this. HSA came in as part of the 2003 medicare changes http://www.irs.gov/pub/irs-drop/n-04-2.pdf . It mentions the "first-dollar coverage" term for HDHPs. Also pub 969 adds more info http://www.irs.gov/pub/irs-pdf/p969.pdf. The 8889 instructions refer to 969 for HDHP details.

The plan I was looking at states on page 1 of the brochure that deductible must be met before any benefits are paid; but then on the last page in breaks out generic prescriptions as having copay but doesn't mention "after deductible".... confusing. It would suck to lose HSA because of a $25 copay I'll never use ( well never say never ).
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Old 11-24-2013, 08:12 AM   #29
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Originally Posted by zinger1457 View Post
I believe another requirement for HSA plans is that there can be no payments made by the insurance company (except for certain things like preventive care) until the deductibles are paid. I was also was curious as to why one of my low cost Bronze plans was not HSA eligible since it seemed to meet all of the HSA requirements. When I looked at the plans details on the healthcare providers web site there was a note (not mentioned on ACA) that the deductible is waived for the first primary care office visit. This was the only thing that I could find that might explain why it is listed as not HSA eligible.
Right - free visits or any type of reduced copay nulls it as an high deductible plan.

ACA changed language so that the free (i.e. included) preventative services covered by ACA plans do not violate HD requirements for an HSA. But if they throw in any extra "freebies", that screws things up.
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Old 11-24-2013, 08:13 AM   #30
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Originally Posted by rbmrtn View Post
I believe this is the original IRS document on this. HSA came in as part of the 2003 medicare changes http://www.irs.gov/pub/irs-drop/n-04-2.pdf . It mentions the "first-dollar coverage" term for HDHPs. Also pub 969 adds more info http://www.irs.gov/pub/irs-pdf/p969.pdf. The 8889 instructions refer to 969 for HDHP details.

The plan I was looking at states on page 1 of the brochure that deductible must be met before any benefits are paid; but then on the last page in breaks out generic prescriptions as having copay but doesn't mention "after deductible".... confusing. It would suck to lose HSA because of a $25 copay I'll never use ( well never say never ).
Right - those are the gotchas you have to look out for.
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Old 11-24-2013, 08:49 AM   #31
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My husband and I (both age 62) have High Deductible HI policies. We established HSAs several years ago. We have funded the HSAs to the max. Last year, using Turbotax, I estimated our Federal and state income tax savings due to the HSAs was around $1,200.

We have just applied for the subsidy on the HealthCare.gov and qualified for subsidies of approx $9,000. The only reason we qualify for the subsidy is that we can deduct our HSA contribution in determining our Modified Adjusted Gross Income.

Between the income tax deduction and the subsidy we figure our HSAs will save us around $10,200 next year. And in addition we have over $50,000 (invested in Vanguard mutual funds) in our HSAs growing tax free that we can draw on if we need it.

I highly recommend you look into an HSA if you are under 65.

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Sort of a big-picture question about HSA's and the savings available...

As one component of savings, you get a marginal tax rate "discount" on your health care spending. If you run your $100 doctor visit through an HSA, you save about $15 (if you're in the 15% tax bracket). That's because you didn't have to pay income tax on the $100.

The other component is, because you ran your healthcare expenditures through the HSA, your O-MAGI is lower and could qualify you for ACA subsidies/more subsidies.

The HSA angle is what's primarily driving me toward Bronze and away from Silver and catatrophic when I FIRE in a few months at 55. I want to make sure I've "got this" and it will work for someone going for subsidies, with no W2 income, but plenty of possible Roth conversions.
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Old 11-24-2013, 09:36 AM   #32
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Sort of a big-picture question about HSA's and the savings available... As one component of savings, you get a marginal tax rate "discount" on your health care spending. If you run your $100 doctor visit through an HSA, you save about $15 (if you're in the 15% tax bracket). That's because you didn't have to pay income tax on the $100. The other component is, because you ran your healthcare expenditures through the HSA, your O-MAGI is lower and could qualify you for ACA subsidies/more subsidies. The HSA angle is what's primarily driving me toward Bronze and away from Silver and catatrophic when I FIRE in a few months at 55. I want to make sure I've "got this" and it will work for someone going for subsidies, with no W2 income, but plenty of possible Roth conversions.
Being a single retiree with a state income tax also, I save 31 cents on the dollar with the HSA, so it is a no brainer for me to get the high deductible HSA.
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Old 11-24-2013, 01:36 PM   #33
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ACA changed language so that the free (i.e. included) preventative services covered by ACA plans do not violate HD requirements for an HSA. But if they throw in any extra "freebies", that screws things up.
Free 'preventative services' have been allowed in HD/HSA plans for as long as I can remember. I've had it in my HD/HSA plan for as long as I've had one, about 6 years. I believe the ACA change is that free preventive care is now required in all HD/HSA plans.
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Old 11-24-2013, 02:09 PM   #34
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Free 'preventative services' have been allowed in HD/HSA plans for as long as I can remember. I've had it in my HD/HSA plan for as long as I've had one, about 6 years. I believe the ACA change is that free preventive care is now required in all HD/HSA plans.
When HSAs first started, not even preventative care was allowed to be covered before the deductible was met. A few years ago they changed that and allowed first-dollar preventative care, and the ACA actually makes that a requirement for all compliant plans.
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Old 11-24-2013, 05:31 PM   #35
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Well, I have been reading the rules and there are a lot of 'gotchas' if you are not careful....

If you fail to remain an eligible individual during the test-
ing period, other than because of death or becoming disa-
bled, you will have to include in income the total contribu-
tions made to your HSA that would not have been made
except for the last-month rule. You include this amount in
your income in the year in which you fail to be an eligible
individual. This amount is also subject to a 10% additional
tax.


I was hoping that I could make a payment for December, but that means if I do go back to work and get insurance (most likely), then it would be a bad decision to make that contribution....

I guess I will go back to my original plan to get a short term plan until I get an Obama plan or a job...
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Old 11-28-2013, 04:19 PM   #36
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Originally Posted by rbmrtn View Post
I believe this is the original IRS document on this. HSA came in as part of the 2003 medicare changes http://www.irs.gov/pub/irs-drop/n-04-2.pdf . It mentions the "first-dollar coverage" term for HDHPs. Also pub 969 adds more info http://www.irs.gov/pub/irs-pdf/p969.pdf. The 8889 instructions refer to 969 for HDHP details.

The plan I was looking at states on page 1 of the brochure that deductible must be met before any benefits are paid; but then on the last page in breaks out generic prescriptions as having copay but doesn't mention "after deductible".... confusing. It would suck to lose HSA because of a $25 copay I'll never use ( well never say never ).
When I signed up for my plan, I was assigned a pediatric dental plan at no cost to me because all ACA plans are required to ensure pediatric dental is provided even if there is no-one under 19 on the plan.

The $0 pediatric dental plan I was automatically assigned (and which does not in fact cover me) has a $75 deductible. It took me a while to realize this.

I called and asked about this affecting HSA eligibility. The health insurance agents at BCBS swear this will not affect my HSA eligibility as that plan does not apply to me and my coverage. It was required to met the ACA regulation unless I provided evidence of another plan I had that did, even though there are no children on my (individual adult) plan.

This really bugs me, but I am not comfortable resubmitting an application either, since BCBS has already withdrawn my initial payment.
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Old 11-30-2013, 04:54 PM   #37
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I called and asked about this affecting HSA eligibility.
From Publication 969 (2012), Health Savings Accounts and Other Tax-Favored Health Plans

Other health coverage. You (and your spouse, if you have family coverage) generally cannot have any other health coverage that is not an HDHP. However, you can still be an eligible individual even if your spouse has non-HDHP coverage provided you are not covered by that plan. You can have additional insurance that provides benefits only for the following items.
  • Liabilities incurred under workers' compensation laws, tort liabilities, or liabilities related to ownership or use of property.
  • A specific disease or illness.
  • A fixed amount per day (or other period) of hospitalization.

You can also have coverage (whether provided through insurance or otherwise) for the following items.
  • Accidents.
  • Disability.
  • Dental care.
  • Vision care.
  • Long-term care.
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Old 11-30-2013, 08:32 PM   #38
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From Publication 969 (2012), Health Savings Accounts and Other Tax-Favored Health Plans

Other health coverage. You (and your spouse, if you have family coverage) generally cannot have any other health coverage that is not an HDHP. However, you can still be an eligible individual even if your spouse has non-HDHP coverage provided you are not covered by that plan. You can have additional insurance that provides benefits only for the following items.
  • Liabilities incurred under workers' compensation laws, tort liabilities, or liabilities related to ownership or use of property.
  • A specific disease or illness.
  • A fixed amount per day (or other period) of hospitalization.

You can also have coverage (whether provided through insurance or otherwise) for the following items.
  • Accidents.
  • Disability.
  • Dental care.
  • Vision care.
  • Long-term care.
Thanks very much bampshd! - that really spells it out.

1. dental plans don't disqualify one's HSA eligibility

and

2. I am not covered by that pediatric dental plan anyway.
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Old 12-01-2013, 09:21 AM   #39
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and qualified for subsidies of approx $9,000
JoAnn, what did you mean by $9000 in subsidies? I don't know what that means.
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Old 12-01-2013, 11:27 AM   #40
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When do you contribute to your HSA?:
  • Monthly - for each month that I am eligible.
  • In December for the current year.
  • In April (or when I file my taxes) for the prior year.
  • In January for the full (current) year as I am confident my insurance situation won't change.

Just curious.

I don't expect our insurance to change during the year, but just to be safe we may contribute monthly which would give us the advantage of averaging in assuming some of it is directed to long-term investments. There may be account minimums we have to meet that would delay this approach.

OR we could wait until Dec (or the next April) for a year we know we are eligible for the entire year and contribute the full annual amount then. This is simpler.

I don't think I'm comfortable contributing in Jan for the current year because who knows what could happen during the year?
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