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HSA--Any thoughts?
Old 12-24-2007, 07:22 PM   #1
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HSA--Any thoughts?


My insurance broker is really pushing the overall benefits of HSA plans. At least on the surface, they truly seem to embrace a panoply of advantages. Anyone have any personal experience with this type of health insurance?


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Old 12-24-2007, 07:33 PM   #2
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I've had one for two years and have no complaints. If you haven't seen this HSA FAQ thread, take a look - lots of good information.

Numbers is hard.

Retired in 2005 at age 58, no pension

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Old 12-24-2007, 08:01 PM   #3
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Thanks so much REW! What a great site. HSAs seem almost "too good". That's why I remain a bit skeptical. But so far virtually everything I've read is extremely positive.

My only true reservation is that why haven't these plans become more of a mainstream insurance product? They've been available for years yet so few of us have taken advantage of this program. Just feel that I may be overlooking some cogent points.

Thanks again,
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Old 12-24-2007, 08:37 PM   #4
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I think that the big issue is that you have to have a high deductable plan to take advantage of it and a lot of people don't want to come up with the money to do that, they are more used to the $20 copay. Our megacorp is switching this year and there was lots of resistance.
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Old 12-24-2007, 08:42 PM   #5
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I agree with bssc. The high deductible is a big hurdle to a majority of insureds.
Numbers is hard.

Retired in 2005 at age 58, no pension

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Old 12-24-2007, 09:58 PM   #6
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I wish we could get a HSA. What does that tell you?
my bumpersticker:
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I am retired.
And I don't care how big your truck is."
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Old 12-25-2007, 07:03 PM   #7
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I love mine!!!!!!!!!!!

Wonerful deal for the consumer, especially if you are in good health.

Many folks don't have the financial resources to cover the higher deductible so it is just too scary to switch.

I believe I'm about to start my third year on the plan and despite some moderate medical expenses including braces for the kid. We are carrying a $3,000 positive balance in to the new year. We have maxed it out again for 2008 and I daydream of retiring with $40 or $50 or $60,000 in the account. The amount I pay each week for the premium and my contribution is about the same as what I was paying for just the insurance premium and those folks kept all the money
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Old 12-26-2007, 08:08 AM   #8
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I think if you're generally healthy (to where you rarely rack up more than $1000 or so in medical bills and prescriptions) and you can afford to fund the HSA, it's probably a great alternative.

My megacorp is offering one for the first time in 2008, so I'm willing to try it. The family deductible is $2500...but they will put almost $800 into the account this year, plus the HDHP option is $1100 per year cheaper in payroll deductions. So that's $1900 of the $2500 deductible right there. Plus, by the time we'd hit $2500, the PPO option with copays and prescriptions would have probably cost us at least $600 out of pocket anyway (based on $400 individual/$800 family deductible). So when we ran the numbers, it seemed like a no-brainer based on how they priced the different plans.

One of the things I like most about it is that it can be used to pay the premiums under COBRA if it comes to that. If I lost my job after I was able to amass a decent chunk of money in it, I'd have a source to pay the premiums for quite a few months even as our income was greatly reduced.
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)
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Old 12-26-2007, 11:21 AM   #9
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I opened one for 2008 and have my fingers crossed. I figure I'd fund one of these for the next 11 years until I hit 65, when Medicare Part A would then apply. I have the ability to fully fund the HSA and catch-up contributions early in the year, and my employer makes a $1500 contribution, annually. Our family deductible is $3000 and our catastrophic limit is $5000. After May of this year, we'll have family coverage of just me and my wife. We can also make the contributions from salary on a pre-tax basis.

One of the big selling points for me is that the HSA is like a super-charged hybrid-IRA, where you get the benefit of tax-free compounding and distributions are also tax-free if used for medical expenses. And the medical expenses that are allowed are very broad. You can pay your long-term health care premiums from the HSA, which was attractive to us.
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Old 12-26-2007, 01:42 PM   #10
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On HSA's from

Karen Kerrigan

is president of the Small Business and Entrepreneurship Council
(Small Business and Entrepreneurship Council)

In most American homes, the rising cost of good health care - like the
rising costs of gasoline and home heating - remains a perpetual
kitchen-table discussion. It is especially front and center now as we
are in the annual "open enrollment season," when employees decide
which of their company's health plans they will choose for the coming

This year, two underlying trends are catching the attention of
consumers and industry alike, and it appears they will continue to
shape the health-coverage market.

The Kaiser Family Foundation reports that the share of companies with
fewer than 200 workers that offer health benefits is down to 59
percent and falling. Two out of every five of these workers are now
without coverage and have to find health insurance for themselves -
and their families - some other way, and their numbers are expected to

As more Americans search for alternative, affordable ways to find
coverage for health care, they are increasingly being drawn to Health
Savings Accounts. The Treasury Department forecasts that, by 2010, 25
million to 30 million Americans will be covered by HSAs.

How it works: With an HSA (in conjunction with a high-deductible
health insurance policy), money is placed into a tax-deferred health
account. That money can be withdrawn without any tax penalty as long
as it is used for medical purposes - including vision and dental care.
As the money in the HSA grows, it builds financial resources a patient
can use for routine or future medical care. Any money left in the
account at the end of the year rolls over to the next year. The
leftover funds are the individual's to keep, and more money is added
in the new year.

HSAs are a smart option for the self-employed, owners of small
businesses, and employees and people whose companies are dropping
health benefits.

Initially a boutique health-coverage product, HSAs are now being
offered by virtually all of the top insurance companies, such as Aetna
Inc., Cigna Corp., and Blue Cross and Blue Shield. The company that
pioneered the HSA concept, UnitedHealth Group Inc.'s Golden Rule
Insurance Co., reports that more than 40 percent of its customer base
is now covered by HSAs.

Both consumers and employers are driving this trend in the market. The
share of all companies - not just those with fewer than 200 workers -
now offering HSA plans is up to 40 percent. The 75,000 people who work
for Eastman Kodak Co. will be offered three health plans this open
enrollment season, including a plan in which they would not have to
pay any premiums but have a higher deductible and that plan will
include a Health Savings Account.

Small and self-employed businesses - where the overwhelming majority
of American jobs are being created - continue to turn to HSAs as a
cost-effective way to cover workers. Tom Terrill, a suburban Chicago
insurance broker, recently told the Chicago Tribune that small
businesses are turning to HSAs in greater numbers in the Chicago area
because "data is mounting to demonstrate their merits."

Government is part of the trend as well. In their new contract with
Orange County, Calif., the county's 1,600 sheriff's deputies have a
provision that phases in HSAs as a substitute for what the county
traditionally grants to retirees.

Even some labor unions are proposing HSAs be put in their next
contract. In Tiverton, R.I., the teachers union proposed moving from
traditional health insurance to a high-deductible plan that would
include a Health Savings Account. The city and the union eventually
agreed on a contract without HSAs, but the union's proposal is
noteworthy. Past congressional debates over HSAs once featured
organized labor's opposition; the Tiverton teachers union is an
affiliate of the National Education Association, proof that minds and
hearts change over time.

The growing popularity is rooted in the product's middle name:
savings. A consumer will typically save up to 50 percent on an HSA
plan premium over traditional health plans.

Further, an HSA policyholder has more control over his or her
health-care budget; you make the decision when to spend and when to
save. And the money you don't spend accumulates year after year
earning interest - reserves that can help meet the increased health
costs of later life and retirement.

Some of the working population is lucky enough to have a traditional
health-insurance plan that works for them, but for the rapidly growing
number of people who are swiftly losing their benefits, HSAs are not
only a cost-effective alternative, but one that allows them a lot of

The market is changing. Employers, self-employed people, workers,
consumers and governments are adjusting. But in this cost-conscious
environment, it is virtually certain these trends will continue and
many consumers can still benefit from what have been positive changes
in health coverage options.

E-mail Karen Kerrigan at
Dreams Worth Dreaming are Dreams Worth Planning For. I Spent a Career Planning for Early Retirement.
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Old 12-26-2007, 04:09 PM   #11
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This will be our second year of having a HSA. We got private insurance a year ago as part of FIRE prep. The process was cumbersome but actually using the insurance and HSA was very easy. We plan to max the contribution each year and that hopefully will help us build up savings for later years if needed.

First years experience we were all healthy and the Ins. paid 100% of the wellness care including flu shots! Net expenses charged to the HSA were slightly less than the interest it earned.

A good first year and hopefully we can have a few more but its nice to know that the yearly expenses will not be quite as much as the HSA contribution although a year like that would probably cause a rate increase!

Overall HSAs have been good and it did facilitate FIRE for us.
Worked the plan and now living the Dream!
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Old 12-26-2007, 04:40 PM   #12
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Have encountered a significant problem. With the UNICARE program that we were considering there is a $10,000 family deductible. So essentially we'd be responsible for the first $10,000 of total HC expenses. We can live with $5,000, but $10,000 seems a bit extreme for my wife & I.

Any suggestions?

I'll check-out Golden Rule & some others in the interim. Thanks so much!

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Old 12-26-2007, 06:11 PM   #13
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Humana might be an option also. My experience has been good.
Worked the plan and now living the Dream!
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Old 12-26-2007, 06:43 PM   #14
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When my health insurance for 2008 was going up from $290 to $371 a month, I switched to an HSA account with a $2700 deductible. I'm going to open my HSA account at Patelco Credit union, which has a local branch in my town. Their HSA account pays 5.12%.

My premium dropped from $371 to $259, which makes it a much more affordable plan. I usually have 2 or 3 office visits and maybe some routine lab each year, so I expect to not touch the HSA and let it grow.

I'll post again after I've used it and have something to share.
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Old 12-26-2007, 07:57 PM   #15
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Originally Posted by KB View Post
When my health insurance for 2008 was going up from $290 to $371 a month, I switched to an HSA account with a $2700 deductible. I'm going to open my HSA account at Patelco Credit union, which has a local branch in my town. Their HSA account pays 5.12%.
We are in process now with Goldenrule (United Health Care) Keeping fingers crossed.

I really liked the option of investing in several decent Vanguard funds with

Hope to do better than 5% offered by most other's I've seen.

Good Luck

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Old 12-26-2007, 09:09 PM   #16
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My employer switched to a HSA plan a year before I retired. My employer-paid coverage continues in retirement and I find that the HSA is a good way to recover a portion of the out of pocket expenses. The HSA provider, Wageworks, has been a PITA, constantly misunderstanding documentation and rejecting it wrongly and just recently paid a $10 claim as $1000. I plan to move to Patelco as soon as I can get my current account straightened out.

In general, I like the HSA concept.

Yes, I have achieved work / life balance.
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