HSA questions. Using funds when no longer on a HSA plan?

[SSdoxie]

Each company may have different rules but check out possibility of taking a loan form 401k. I had this option and used it some 10 years ago to clear out all credit card debit and couple large hospital bills, and car loan. Loan was @ 5% with stipulations I could not contribute to the 401k until loan was paid off so no company match during this time. The monthly loan payment was deducted from my paycheck, the 5% interest went into my 401k, loan could be paid off at anytime in one lump sum. Working off the same budget I was on, I took the money I had been paying monthly on cards and dumped in a savings escrow until I had enough to pay off loan completely then restarted 401k contribution at double the original rate. I did this starting in 2009 when markets were down and company had reduced matching funds 50%. Took me 3 years to bring 401k balance back up to equal original balance at that time company went back to full 6% matching funds.

401k may not be doing much with investment growth but I sure liked getting that extra 6% income to use now that I took retirement April 1st.

 

[Snobdds]

I would not get out of the HDHP with HSA plan. I'm an Actuary for BCBS and the old low deductible plans are quickly going away, at least for the Blues. The cost is quickly overcoming the benefit. Then you will have an opportunity cost of forgoing the contributions by your employer when you were on the other plan.

Now think about it, are you going to recoup enough in lower premiums and "your" cost share to overcome the tax advantage and employer contribution of the HDHP?

 

[LD1]

Each company may have different rules but check out possibility of taking a loan form 401k. I had this option and used it some 10 years ago to clear out all credit card debit and couple large hospital bills, and car loan. Loan was @ 5% with stipulations I could not contribute to the 401k until loan was paid off so no company match during this time. The monthly loan payment was deducted from my paycheck, the 5% interest went into my 401k, loan could be paid off at anytime in one lump sum. Working off the same budget I was on, I took the money I had been paying monthly on cards and dumped in a savings escrow until I had enough to pay off loan completely then restarted 401k contribution at double the original rate. I did this starting in 2009 when markets were down and company had reduced matching funds 50%. Took me 3 years to bring 401k balance back up to equal original balance at that time company went back to full 6% matching funds.

401k may not be doing much with investment growth but I sure liked getting that extra 6% income to use now that I took retirement April 1st.

Just to be clear, I am not looking to take any money out of either my 401k or HSA. Just think its not right to be penalized IF one needs to take some of THEIR money to put to better uses.

At least with your loan, you get your interest payments. B eats giving them to the bank. But sucks loosing a company match though. Have to weigh those numbers carefully to see what is the best option I guess.

 

[LD1]

I would not get out of the HDHP with HSA plan.

So you would advise that I continue to pay more for healthcare? Where is the logic in that?

Then you will have an opportunity cost of forgoing the contributions by your employer when you were on the other plan.

The contributions dont come close to offsetting the cost difference in the plans

Now think about it, are you going to recoup enough in lower premiums and "your" cost share to overcome the tax advantage and employer contribution of the HDHP?

Not much tax savings When option a requires a lot of out of pocket (but on an HSA that I dont pay tax on), and option b i pay for with taxed money but is a whole lot less.

Currently I have the better of our health plans. It cost me $385/mo for a family. Covers 100% of the preventative stuff, and 80% on other stuff. Company puts in $2000. So..........385/mo is $4620 per year.
So my plan basically cost me $4620 per year, and dont really have any expenses that add up to more than the $2k the company gives. So look at it like no cost through out the year other than premiums.

If wife gets new job with county benefits, its $165/month or $1980 per year. Most are $15 and $25 copays. $100/$200 deductible. And lots lower annual out-of pocket max. of 1250/2500, whereas the HDHP I am on now is 3500/7000.

Would take ALOT of trips and ALOT of copays to offset the difference in premiums of $4620 and $1980.

And even in a year where something MAJOR happens, I'd much rather be on a plan that had a MAX annual out of pocket of 2500 vs 7000.

 

[LD1]

Forgot to mention dental. Seems those plans are super expensive.

I have always worked union jobs normally. And our dental ins. was always just a few bucks a check. And maybe $8 for a family.

Where I am at now isnt union, dental is crazy expensive. Same with the wifes. Not sure it even makes sense to have dental anymore and considering just dropping it and paying our of pocket whenever we go.

Wheres the logic in paying ~$95/month for family dental on a plan, that only has a $1000 annual max? Pay ~$1200 to have them cut you off at $1000????

Right now with a $1200 premium, then having to pay my co-pays/co-insurance for fillings, x-rays, whatever, I probably spend $1600/yr on dental.

And honestly, for routine care and cleanings and an occasional filling, I dont think I would come close to spending $1600 without insurance????

 

[k0ua]

Forgot to mention dental. Seems those plans are super expensive.

I have always worked union jobs normally. And our dental ins. was always just a few bucks a check. And maybe $8 for a family.

Where I am at now isnt union, dental is crazy expensive. Same with the wifes. Not sure it even makes sense to have dental anymore and considering just dropping it and paying our of pocket whenever we go.

Wheres the logic in paying ~$95/month for family dental on a plan, that only has a $1000 annual max? Pay ~$1200 to have them cut you off at $1000????

Right now with a $1200 premium, then having to pay my co-pays/co-insurance for fillings, x-rays, whatever, I probably spend $1600/yr on dental.

And honestly, for routine care and cleanings and an occasional filling, I dont think I would come close to spending $1600 without insurance????

The dental policy I sell, there is no annual or lifetime maximum.

 

[LD1]

I have access to a few different plans. And at a few different price points.

More expensive plan covers orthodontistry for the kids. Pretty normal coverage seems to be 100% preventative, 80% minor, 70% major, and 50% ortho.

So still quite a bit of co-insurancs above preventative. Given that and the $800 to $1200 premiums, I think having insurance is COSTING me money.

Seeing the bills, and what the dentist bills vs "negotiated rate" , etc. (And the billed rate is likely a higher rate than someone without ins would pay)....I think if I didn't have insurance I would only pay maybe $500-$600 a year.

I'd be paying 80% more (the insurance part) for filling etc. And the visit/cleaning would be on me. But it would take a pretty huge family and lots of cavities to cover a $1000 premium I think

 

[k0ua]

I have access to a few different plans. And at a few different price points.

More expensive plan covers orthodontistry for the kids. Pretty normal coverage seems to be 100% preventative, 80% minor, 70% major, and 50% ortho.

So still quite a bit of co-insurancs above preventative. Given that and the $800 to $1200 premiums, I think having insurance is COSTING me money.

Seeing the bills, and what the dentist bills vs "negotiated rate" , etc. (And the billed rate is likely a higher rate than someone without ins would pay)....I think if I didn't have insurance I would only pay maybe $500-$600 a year.

I'd be paying 80% more (the insurance part) for filling etc. And the visit/cleaning would be on me. But it would take a pretty huge family and lots of cavities to cover a $1000 premium I think

The plan I sell is an indemnity plan. It pays up to a set amount for each dental procedure. No maximums, no percentages. Easy to understand what you are getting and what you are paying for. Call you local Physicians Mutual agent and ask about dental. I cannot sell in your state.

 

[buckeyefarmer]

Called my hsa company today. Once you stop having the high deductible plan, you can't contribute to an hsa, but you can still use it for qualified expenses.
In my case, i will have to pay the monthly maintenance fee that my soon to be previous employer was paying.
If i close the hsa i have to pay tax and a 20% penalty.

At first i was against the high deductible plans, but now think they are better.

 

[LD1]

I agree, HSA plans aren't as bad as they appear on the surface. Especially if your employer contributes.

But in my case, if the wife gets the new job with the low deductible county benefits, it's better than my HSA