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Open HSA or not?
Old 11-02-2012, 02:25 PM   #1
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Open HSA or not?

I am considering opening an HSA (Health Savings Plan) through my work. My husband and I recently got married and we work for the same university. He is on the HDHP ($1500 deductible, then 20% kicks in) and has an HSA that he maxes yearly.

Currently, I pay monthly premiums and have a good Rx discount of $5 for 90 days of generic ($750 deductible). For the year, I pay $259.60 total ($219.60 in premiums and $40 for two Rx). Office visits (non-preventative care) are $35 after deductible is met.

If I were to open my HSA , I’d have to pay full price for these two Rx that I take regularly, so probably looking at $541 yearly for the Rx. So I'd be paying $281 more but gaining an HSA.

We can do a dual coverage plan as married university employees (no more HSA contributions though), we get super low deductible ($350/pp), $1.25 Rx for 90 days, and non-preventative office visits are $10, and premiums of $494 for the year. HR likes to push this plan vehemently, but we are trying to do the calculations to see if it's right for us (we'd loose this HSA option).

With all plans, preventative health care is free (vision, hearing, gyn).

Do we visit the doctor a lot?

My husband (age 34)? Rarely.

Me (age 36)? I had have years when I went a lot (had some weird anaphylactic reaction and about 20 emergency room visits one year :|), but lately, as in the past 5 years, I’ve been very healthy thankfully.

We can change plans yearly during open enrollment.

1. So should we both do the HSA and utilize this triple tax advantage account, but cough up monthly for my full cost Rx and any surprise doctor/ER visits?

2. Alternatively he’d keep his HSA, I'd keep my plan with the cheap Rx, and I’d put my money in a pre-tax 403b instead.

3. Both of us get on the dual coverage discounted plan (with premiums), but no more HSA contribs (money can go to pre-tax 403b instead).

[Other retirement info: we currently max out two ROTHs, two 457b and his HSA, plus two employer funded 401a.]
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Old 11-02-2012, 03:03 PM   #2
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I always thought of my HSA as an additional opportunity to save on a tax-free basis (sort of like a supplemental Roth) and have the insurance to 1) avoid catastrophic loss in the event DW or I had a major illness and 2) get access to negotiated rates for medical services. Since you both seem to be savers, young and in good health, I would take a hard look at each having high deductible health insurance and a HSA, and paying any out-of-pocket medical costs from you take home pay (rather than the HSA).

Have you checked into whether you can get your Rx at Walmart, Costco or one of the other discount pharmacies? With the HDHP my DW gets her Rx at Walmart and it is very affordable.
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Old 11-02-2012, 03:10 PM   #3
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Originally Posted by pb4uski View Post
Have you checked into whether you can get your Rx at Walmart, Costco or one of the other discount pharmacies? With the HDHP my DW gets her Rx at Walmart and it is very affordable.
Is this the $4 generics list you are referring to? I did not see either of my two drugs on there unfortunately. That would definitely help if I can find these drugs cheaper somewhere! Or do you mean buys her full cost Rx at a good rate at Walmart?

So two HSA seems good for us right now in your eyes? Paying $281 extra a year to enjoy a triple tax advantage HSA seems like a good deal in the long run?
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Old 11-03-2012, 09:58 AM   #4
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OK, new info found!

Since we are married, and if we file jointly with me has a dependent (this will be our first married tax return), he can max his HSA for 2013 at $6450 (the family max), but I do NOT have to switch to an HDHP myself nor do I have to open an HSA. I can stay on my low premium plan to enjoy the $5 Rx deal, plus we can enjoy the benefit of the HSA as if two of us owned one basically.

So now I don't know the difference between me as a dependent and me not as a dependent on taxes.
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Old 11-03-2012, 10:30 AM   #5
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Hmm, OK, now I am seeing that you cannot claim one spouse as a dependent ever. Why did the HSA lady tell me this?

So I guess he cannot max the family contribution since I cannot ever be a dependent?

Anyone?
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Old 11-03-2012, 10:43 AM   #6
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Originally Posted by ginadog View Post
Hmm, OK, now I am seeing that you cannot claim one spouse as a dependent ever. Why did the HSA lady tell me this?

So I guess he cannot max the family contribution since I cannot ever be a dependent?

Anyone?
Here are the IRS rules governing HSA contributions:
Publication 969 (2011), Health Savings Accounts and Other Tax-Favored Health Plans
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Old 11-03-2012, 10:48 AM   #7
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Thanks! So if I understood that correctly, two married people cannot be on one HSA (to get the family max contributions), and certainly I could NOT keep my low premium plan for him to utilize the family max contributions. Correct?

Looks like I'll have to switch to HDHP and open my own HSA?
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Old 11-03-2012, 10:51 AM   #8
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Ginadog,

Simplifying a bit, as long as you don't have other insurance, you can be on the Spouse's HDHP and s/he can qualify for full family HSA contribution.

if you choose to keep your present insurance, spouse can do HDHP/HSA, but not contribute "family" amount to HSA.

Double check on the IRS Pub, but this is my understanding, and what we have been doing for a decent amount of time.
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Old 11-03-2012, 11:09 AM   #9
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That HSA lady (Health Equity) said I could keep my low premium plan with the Rx deal, but my costs would not go towards his deductible and we could still do the family contributions if I'm claimed as a dependent. I do clearly see the part about not having any other coverage from your link. This woman was off!
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Old 11-03-2012, 12:51 PM   #10
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If DH's policy provides family coverage he can take a deduction of $6250. If the policy is individual coverage he can take a deduction of $3100. It sounds like his coverage is individual, so the lower deduction applies.
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