Another Savings Tool?

[Dog]

Interesting Article -

http://finance.yahoo.com/retirement/article/102589/Unhealthy-Strategy?

 

[Peaceful_Warrior]

Just curious about this... anybody currently using an HSA, and if so, how much are your premiums/deductibles?

 

[bssc]

My MegaCorp is switching all Phoenix employees to an HSA next year. They have already made the switch in other areas. Interesting to read about since we have maxed out our 401(k)s.

 

[2B]

My employer has a high deductible plan as an option which I signed up for. There is no cost to the employee! The family deductible is $2,200 per year and after that the plan covers 80% up to a maximum out of pocket of an additional $8,800.

It's not as bad as it looks but only about 1/3 of the company has signed up for it after 2 years. The "normal" family plan has a $250 deductible but it costs a family about $4,700/yr to be in it. Then there are copays of $20 for a doctor visit and anywhere from $20 to $45 for drugs. I estimate my annual "at risk" for being in the plan at around $4,500 to 5,000 when I figure in what I would expect as copays.

I ran the numbers and figured I would make money if we spent less than $10,000 in actual medical costs. Last year we spent about $3,500 so I personally paid about $2,500. We do get PPO rates.

I'm maxing out my HSA contributions but I don't intend to use them until I'm retired. I consider it an additional 401k contribution.

 

[bow-tie]

My employer has a high deductible plan as an option which I signed up for... I'm maxing out my HSA contributions but I don't intend to use them until I'm retired. I consider it an additional 401k contribution.

Ditto what 2B said

 

[justin]

We have a High Deductible plan. $2400 family deductible. Then we pay 20% of everything above that up to $3500 out of pocket. Costs $300/yr through employer for full family coverage.

The HD plan covers physicals and well-baby/child visits for $0 copay. We get negotiated rates on everything (the regular insurance co. discounts apply to what we pay). Prescriptions we are getting through the mail-order pharmacy, resulting in us paying about the same out of pocket as when we had the $5-$10 generic copays and shopped at the retail pharmacy.

Currently planning on maxing out the HSA's ($2400 at the company's HSA through Aetna, and the other ~$3200 at the local credit union paying 5% interest)

 

[Peaceful_Warrior]

I really wish we had a plan like that. The only reason I really carry health insurance is to cover for expensive problems that could cause financial ruin.

We have a High Deductible plan. $2400 family deductible. Then we pay 20% of everything above that up to $3500 out of pocket. Costs $300/yr through employer for full family coverage.

The HD plan covers physicals and well-baby/child visits for $0 copay. We get negotiated rates on everything (the regular insurance co. discounts apply to what we pay). Prescriptions we are getting through the mail-order pharmacy, resulting in us paying about the same out of pocket as when we had the $5-$10 generic copays and shopped at the retail pharmacy.

Currently planning on maxing out the HSA's ($2400 at the company's HSA through Aetna, and the other ~$3200 at the local credit union paying 5% interest)

 

[justin]

I really wish we had a plan like that. The only reason I really carry health insurance is to cover for expensive problems that could cause financial ruin.

That's essentially what I want it for. Spending a few thousand on healthcare in a really really bad year (with all of it covered in the HSA after the 1st year) isn't bad, considering the HSA balance keeps a-growin'!

 

[deserat]

Ignorant question here - when you say the HSA is another savings tool - is that for healthcare expenses only? I noticed that 2B and bow-tie are saying they'll just max out the contibutions and use it at retirement - is it treated like an IRA but only for healthcare expenses - or can I use it for other expenses?

I'm covered in a healthcare plan now which is totally covered by my employer and upon retirement will have a healthcare plan, but would like to know if there is another way to put away some tax deferred dollars....

Deserat

 

[jdw_fire]

Ignorant question here - when you say the HSA is another savings tool - is that for healthcare expenses only? I noticed that 2B and bow-tie are saying they'll just max out the contibutions and use it at retirement - is it treated like an IRA but only for healthcare expenses - or can I use it for other expenses?

I'm covered in a healthcare plan now which is totally covered by my employer and upon retirement will have a healthcare plan, but would like to know if there is another way to put away some tax deferred dollars....

Deserat

First I will repeat that to be eligable for a HSA your only health insurance has to be of the high deductable variety.

Now for your question, when you make a WD from an HSA it is tax free if it is for medical expenses (whether direct payment or a reimbursement) no matter what your age is. If the WD is not for medical expenses then you will owe income taxes on the WD (it will be treated as regular income). If when you make a taxable WD you are under 65yo you will also owe a penalty.

What I plan on doing is making maximum contributions to my HSA between now and when I turn 65 (can't make contributions after you are 65yo). I also plan to make zero WDs in that time frame. However I will keep all my medical payment receipts from now on and when I do finally make a WD I will first claim reimbursement for medical payments made dating all the way back to the year I started my HSA, thus making the first WDs (or portions there of) tax free.

 

[REWahoo]

Deserat, here's a link to more info. on HSA's:

http://www.ustreas.gov/offices/public-affairs/hsa/pdf/HSA-Tri-fold-english-06.pdf

 

[justin]

However I will keep all my medical payment receipts from now on and when I do finally make a WD I will first claim reimbursement for medical payments made dating all the way back to the year I started my HSA, thus making the first WDs (or portions there of) tax free.

I didn't realize this was possible. I assumed that you would have to reimburse yourself from your HSA year by year, similar to FSA reimbursement guidelines. I thought it was use it or lose it year by year. I'll have to look into this further.

edited to add: I have never heard of this approach and it sounds genius, assuming it is legal! I better get a bigger box for all those receipts...

 

[renferme]

My wife has an HSA ; money taken from her pay goes to Aetna.
When she has a claim she files and Aetna is supposed to re-emburse.
But what she and many others have found out, is that Aetna routinely rejects
claims.
Apparently Aetna wants to keep the money, so they reject a claim and hope the employee accepts their fate.
Appears to be a scam and many complaints have been made to her company's HR dept. I look for a switch to another company next year.
.
Anyone else have similar problems with their HSA ?

 

[justin]

My wife has an HSA ; money taken from her pay goes to Aetna.
When she has a claim she files and Aetna is supposed to re-emburse.
But what she and many others have found out, is that Aetna routinely rejects
claims.
Apparently Aetna wants to keep the money, so they reject a claim and hope the employee accepts their fate.
Appears to be a scam and many complaints have been made to her company's HR dept. I look for a switch to another company next year.
.
Anyone else have similar problems with their HSA ?

We have DW's HSA (not FSA) with Aetna, too. They gave us a debit card to reimburse ourselves whenever we want to from ATM's. The burden of showing legitimate medical expenses falls on us. Aetna doesn't care too much if you keep the funds with them. The accountholder, not Aetna gets the interest/earnings on the HSA account for the most part. Your HSA dollars aren't forfeited at the end of the year like FSA dollars.

I've had the problem with FSA's where the administrator won't release funds because they want to keep the money.

 

[2B]

Ignorant question here - when you say the HSA is another savings tool - is that for healthcare expenses only? I noticed that 2B and bow-tie are saying they'll just max out the contibutions and use it at retirement - is it treated like an IRA but only for healthcare expenses - or can I use it for other expenses?

The money that goes into a HSA is tax deferred just like a 401k. This difference is that the money can be used for medical expenses tax free. There is no time limit.

I just realized that the money is tax free and I might as well use it now since it balances out against my medical expenses. I get the same tax deduction on income and what I would have paid out of "taxed income" can now go into after tax savings (if I keep the discipline to not piddle it away). Since I'm having ~$6400 coming out this year, I should still have a substantial surplus.

 

[MooreBonds]

Just curious about this... anybody currently using an HSA, and if so, how much are your premiums/deductibles?

Age 30
$5,100 deductible
$495 annual premium
Socking away $2,850/year (or whatever the max allowed by the IRS regulations, indexed to inflation) into my HSA, with no withdrawals for expenses. $813 is contributed by my employer (since my insurance is cheaper than the standard policy), and the rest is deducted pre-tax wages. Also, my employer pays for my policy.

I plan on spending as little from the account as possible, since it has the greatest tax benefits out of any possible savings plan (it's the best of a ROTH and Traditional IRA, all rolled into one!)

 

[Khan]

Age 56
Retired Fed
Monthly Premium - $73.24 (actually went down from last year)
Deductible - $2500
Amount in HSA - ~$2200
Haven't accessed it yet

 

[deserat]

Thanks to all who answered my question - looks like I won't ever be eligible....but that's OK...sort of. The tri-fold is interesting - I like the first four lines telling you who isn't eligible.....

Deserat