HSA: do you used it?

[pandus13]

Hi BITOG-ers,

I see we have some really knowledgeable (in investing and getting the most for their money) folks here so there it goes:

-Do you have and HSA (Health Savings Account)?
-How do you fund it? monthly/weekly/lump sum?
-Do you used it? (Health related/qualified expenses)
-Do you used it for investing? If yes how?

Thank you

 

[Donald]

HSAs are good to pay for medical/dental co-pays and deductibles.

But only if you pay for them with pretax dollars. Some companies match your first $500 you contribute.

Since the money stays in the account there is no risk of not using the money during any one year.

I typically use ESA and while the contributions are pretax you have to use the money during the calendar year. Sometimes one quarter into next year is OK also.

With high deductible medical plans, an HSA is the way to go.

 

[javacontour]

I use an FSA, a flexible spending account. I put the max, ($2600, IIRC) into my account. The whole amount is available 1 January even though the contributions are taken from my paycheck 2x/mo.

They are pre-tax dollars, so it helps with the income tax. I pay for glasses, contacts, contact solution, prescription meds, co pays, and even dental charges.

I usually use it up before the end of the year with a family of 5. With an FSA, your employer can offer two options, carry over upto $500 or give you 75 days into the next year to use your funds. That really hasn't been a problem for us.

I should have oilBabe see if she can fund one at her workplace as well. But we should have a kid or two getting off the payroll soon

 

[4WD]

It used to be $5k and we used all of it every year. It was dropped to lower amount a couple years ago ...

 

[javacontour]

HSA and FSA are not the same thing. HSA, IIRC, is designed to use with a high deductible health insurance plan and carries over. The FSA is for a year and can have some carry over if the plan allows it. But at some point, it's a use it or lose it proposition.

I believe an HSA can be invested. So if you don't use it, it can be growing in the market.

 

[SuperSalad]

Originally Posted By: pandus13
Hi BITOG-ers,

I see we have some really knowledgeable (in investing and getting the most for their money) folks here so there it goes:

-Do you have and HSA (Health Savings Account)?
-How do you fund it? monthly/weekly/lump sum?
-Do you used it? (Health related/qualified expenses)
-Do you used it for investing? If yes how?

Thank you

- I do have an HSA.
- I fund it with a contribution per paycheck that totals my company's $500 annual match by the end of the year; so semi-monthly.
- I do use it when paying medical expenses or after the fact.
- I do not use it for investing (Multiple child births since I opened the account so lots of medical expenses and not enough accrual in the account to meet the minimum threshold for investiture.)

 

[Linctex]

I Never had an HSA, just an FSA only.

When it was $5,000 - it was great for the kid's braces and when paying for a birth. Then it dropped to $2500.

I used to hate that it had to be used all in one year, but now you can roll $500.
I always buy extra eyeglasses and first-aid supplies before the balance becomes "use it or lose it" deadline.

 

[JHZR2]

Yes. HDHP with HSA is the best deal around. I could get a regular plan but would pay double or more per month, and no return of premium like an HDHP.

If you're careful with saving, there's little risk or issue. More out of pocket, potentially, but not when you consider consistent premium costs.

 

[pandus13]

Originally Posted By: JHZR2
Yes. HDHP with HSA is the best deal around. I could get a regular plan but would pay double or more per month, and no return of premium like an HDHP.

If you're careful with saving, there's little risk or issue. More out of pocket, potentially, but not when you consider consistent premium costs.


JHZR2,

could you explain more about the underlined?


P.S. I consider this because of the pre-tax money, and usually I'm pretty healthy (except the winterly cold and my dental issues)
Thank you

 

[MoneyJohn]

We fund it twice a year, every 6-month mark. We use it for all medical expenses. Our expenses are high, taking into account our child has special needs.

I seriously considered figuring out investments but our medical needs do not allow us to invest (due to uncertainty).

 

[Vuflanovsky]

My previous company funded our HSA at $1000/yr as a perk at the beginning of each year. I typically don't touch it unless I buy new glasses, contacts, or have the very occasional extraneous medical expense. It's funded to the extent that a deductible related to a couple days in the hospital or opting for LASIK eye surgery would wipe it out.

I believe my HSA has been sold at least once since I left the company and the current entity now charges a $5/month maintenance fee and doesn't offer an investment option...neither did the previous plan.

It seems these plans vary considerably in their scope and options and can be sold like mortgages based on different factors.

 

[supton]

We try to put the max into our HSA. One good year with no issues and we've been "ahead" since--worst case, I've got the following year paid for. I figure, it's something to dump money into over the next couple decades. It'll be tax free money that I can spend in retirement on medical needs. Live long enough and those needs will be high.

I haven't figured out what I'll do to invest the money. Bit more leery of that, since its usage is (potentially) closer than usage of my retirement fund. bit more money though and I'll need to, just a few percent to beat inflation (otherwise I'm losing money).

I know you can pay out pocket, using taxed dollars; and years later pay yourself back from an HSA. I'm not really sure why I'd want to do that. For now, all medical expenses are paid from my HSA; it's tax free. I might not save as much per year (in the HSA) doing that, but I think ultimately it's the way to go.

 

[crgstvrs]

I generally have put in what I would consider quite a bit into HSA. I put in until my medical out of pocket max was reached, then reduced amount I put in weekly to closely mirror usual qualified expenses. HSA's are talked up as an investment vehicle but in general my opinion is to invest in retirement plan and merely save in HSA accounts.

 

[Vern_in_IL]

Why even has a HSA? and not just regular savings/brokerage account?

Then you don't lose what you put in, if your healthy. No stupid restrictions, healthcare is [censored] anyways. I pay cash, in an emergency do I really want to worry about "in network" or "out of network", deductibles, and fighting with lawyers when my insurance did not pay a doctors bill and fighting over a medication that was not on the approved list?

 

[JHZR2]

Originally Posted By: pandus13
Originally Posted By: JHZR2
Yes. HDHP with HSA is the best deal around. I could get a regular plan but would pay double or more per month, and no return of premium like an HDHP.

If you're careful with saving, there's little risk or issue. More out of pocket, potentially, but not when you consider consistent premium costs.


JHZR2,

could you explain more about the underlined?


P.S. I consider this because of the pre-tax money, and usually I'm pretty healthy (except the winterly cold and my dental issues)
Thank you


Sure. I can only explain how mine works, so read plan details and understand all cost and deductible/coinsurance guidelines.

My HDHP with HSA costs $x/month. Any decent family plan from my employer costs $2*x and higher.

My HDHP has an HSA. I can put pre-tax money into the HSA that is mine forever, it does not need to be spent by the end of the year like an FSA.

My HDHP provides some return on premium each month directly into the HSA. Who exactly pays it (really I do and my employer does, I guess, but its a different line item than my deposits) I can't say, but it gives a net reduction on the premium cost because its less I have to pay out of pocket, and this money going into my HSA is mine forever.

The HDHP requires me to pay 100% until a certain level. Beyond that, the HDHP pays 90% and I pay 10%, up to another level ($10kish in total bills). Beyond that, the insurance pays 100%.

So your exposure is the deductible, and then the coinsurance. You know exactly how much you have to pay out of pocket. Sure, if you're hitting deductible and then most/all of the coinsurance year after year because of health issues in the family, it may be better to just pay a higher premium up front and get everyone paid from the first dollar or some minor deductible/coinsurance.

For us, its only when babies have been born that we hit the deductible. The other years we don't hit the full amount out of pocket.

You have to consider first how much less the premium is than an equivalent non HDHP plan. Then you need to consider how much return on premium, if any, you get. From there, you can determine if you're in the money most years (where if you saved the delta of the premium cost, plus any ROP, if you'll end up with more money in the HSA than you've spent), and what your savings profile is.

For us it is profitable to use the HDHP/HSA, even if we go over deductible some years. Over time our HSA has grown and the lower premiums are nice too.

Hope this helps.

 

[SuperSalad]

Originally Posted By: Vern_in_IL
Why even has a HSA? and not just regular savings/brokerage account?

Then you don't lose what you put in, if your healthy. No stupid restrictions, healthcare is [censored] anyways. I pay cash, in an emergency do I really want to worry about "in network" or "out of network", deductibles, and fighting with lawyers when my insurance did not pay a doctors bill and fighting over a medication that was not on the approved list?

Because it pre-tax and can be withdrawn without taxes if used for medical expenses. So I essentially save around 30%ish on the medical expenses I use it for compared to if I payed in cash. That's why.

It is also my money for life with no "use-it-or-lose-it" stipulations.

 

[CincyDavid]

My HSA has just reached the $2500 threshold where we can start investing...gotta take a look at my options when I get a minute. We have a great plan where the company throws their contribution twice a year and my contribution comes out of every check. I can log-in at my payroll site and change the contribution as needed. Not a half-bad thing.