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

[TheMan419]

HSA v. Traditional depends on your costs and health. I work for a company with 27 employees and help make the decision on what plan we go with each year.

HSA seems good if you are really sick or really healthy. If you are really sick the max out of pocket is lower, plus you can cover your share with pre-tax dollars so there is a savings there.

If you are really health, preventative stuff is covered and you have a lower premium so you are good.

If you mid range you likely get screwed.

Of course the answer is always check the math. Find out what the premiums are and what you can expect to pay out of pocket. Which ever is less for you and your family is better. It may not be better for me and mine.

Unfortunately in our company's situation we cannot offer our employees a choice. They either take the plan or they do not take it. Larger companies can offer you the choice of plan A or plan B.

Also check the ACA exchange to see if you qualify for a subsidy or just get a better premium there.

 

[wjmst]

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????

That is probably a $1000 max per person limit.

 

[Travelover]

An HSA is like free money. You can put up to $4350 yearly for an individual over 55 ($7750 for a family) into the HSA and it comes straight off your taxable income. Then when you take it out, you never pay tax on it like you would an IRA, as long as it is used for medical/dental/vision care. I have been maxing mine out for years and invest in at HSA Administrators where it is invested in Vanguard funds. When I hit Medicare age, I will use it to pay premiums and out of pocket costs.

If you have a little extra to put away, it is a great deal.

 

[LD1]

That is probably a $1000 max per person limit.

Could be I guess. It don't say.

But in either case, with a house of 4, so 4 visits a year, and insurance costing $1200/yr plus me having to pay 20% or more of anything above a standard cleaning....

It would take something major or a ton of fillings before the plan would actually save me anything.

If I were to take the money for my premium and set aside, (or put in HSA), and use that for the dentist, I bet I would have more left in my pocket at the end of every gear than I do with having insurance.

 

[LD1]

An HSA is like free money. You can put up to $4350 yearly for an individual over 55 ($7750 for a family) into the HSA and it comes straight off your taxable income. Then when you take it out, you never pay tax on it like you would an IRA, as long as it is used for medical/dental/vision care. I have been maxing mine out for years and invest in at HSA Administrators where it is invested in Vanguard funds. When I hit Medicare age, I will use it to pay premiums and out of pocket costs.

If you have a little extra to put away, it is a great deal.

I hear this alot. But don't really agree. It's not free money, rather the money just goes farther. So instead of every dollar you earn amounting to 75-80 cents usable, it's 1:1. But at what cost?

I'll use my two examples and run through some scenarios: (rounding numbers to make it easy.)
Plan A is HSA, cost me $4600/yr, employer puts in $2000, max out of pocket is $7000
Plan B is low deductible. Cost me $2000/yr. Max annual out of pocket is $2500

So if we have a good gear with little issues, and have $1000 med bills.

Plan A would cost $4600, but would still have $1000 left in HSA...total..$3600.

Plan b, $2000 cost +$1000 out of pocket...total $3000....saved $600.

Really bad hear and had over $10k expenses.

Plan A cost $4600, and $7000 annual max, but use up company $2000 contribution. Leaves me needing to pay $5000, but the tax perks of an HSA, that $5000 would have only netfed me $4000. So, $4600+$2000+$4000 is $10600 cost for the year.

Plan B, $2000 cost +$2500 max out of pocket.total $4500. Saves over $6k

Even if it's a stellar year with ZERO unforseen medical expenses and everything is preventative care.

Plan A still. Costs $4600. And would have the $2000 company match left. So true cost...$2600

Plan b still only costs $2000. With $15-$25 copays it would take an awful lot of preventative care visits to make up the $600 difference.

 

[Travelover]

I hear this alot. But don't really agree. It's not free money, rather the money just goes farther. So instead of every dollar you earn amounting to 75-80 cents usable, it's 1:1. But at what cost?..........

You are confusing a Health Savings Account (HSA) with a high deductible plan, apple and orange. If you have a high deductible health plan, you have the option to contribute to an HSA or not. I am pointing out that if one chooses to go with a high deductible health insurance plan, the HSA can be a good way to put money away and never pay taxes on it.

Whether a high deductible plan is best for one's particular situation is what you are arguing. You may be right, but that was not my point.

 

[NorTracNY]

Yes, you need to check the numbers. I don't understand LD1's examples as an HDHP is supposed to be substantially lower cost than a low deductible. Travelover is correct. If you have a HDHP, you should be putting all you can into an HSA. The only issue I've found is that the HSA is similar to a 401K in terms of quality. Our company has a great 401K with low expenses and good investment vehicles, our HSA is bad with only 2-3 low cost investments. The 10 other investments have 1+% expenses.

 

[LD1]

You are confusing a Health Savings Account (HSA) with a high deductible plan, apple and orange. If you have a high deductible health plan, you have the option to contribute to an HSA or not. I am pointing out that if one chooses to go with a high deductible health insurance plan, the HSA can be a good way to put money away and never pay taxes on it.

Whether a high deductible plan is best for one's particular situation is what you are arguing. You may be right, but that was not my point.

I am not confusing them at all. And agree if you have a HSA, it is a great way to save for medical expenses. BUT, the only way one can even be eligible for a HSA is by having a HDHP.

I am currently on a HDHP and contribute to HSA (the point of this thread). But not by choice. Between the wife and I, it is the only thing either of us are offered. But she is interviewing for a new position, and the insurance they offer is a LOW DEDUCTIBLE plan. And it just so happens that its ALOT cheaper than the HDHP plan I have now. So my point is.....It dont make sense for "me" to pay a MUCH higher annual premium, with much higher co-pays and out of pocket expenses, just to have an HSA.

 

[LD1]

Yes, you need to check the numbers. I don't understand LD1's examples as an HDHP is supposed to be substantially lower cost than a low deductible. Travelover is correct. If you have a HDHP, you should be putting all you can into an HSA. The only issue I've found is that the HSA is similar to a 401K in terms of quality. Our company has a great 401K with low expenses and good investment vehicles, our HSA is bad with only 2-3 low cost investments. The 10 other investments have 1+% expenses.

What numbers do you need checked? They are accurate as I have posted them.

In "theory", I agree that a HDHP is supposed to be a cheaper plan than a LDHP, but thats not always the case as in my example. It all depends on where you work, and the portion that the company pays.

I work for a semi-large factory. On paper, our HDHP looks pretty affordable, being only $60/month for family coverage (on paper). But the true cost of the plan factors in alot of other stuff. We have a lengthy wellness program that I dont have the time, or desire to constantly participate in, let alone the wife. Its a lot more in depth than just getting a checkup and blood screen done. There are about 50 things in a calander year you have to do to "earn" the sufficient points to receive the credit., So that drives up the cost. Spousal surcharge, adds to the cost. Then I give-up a $125/mo opt-out credit.....all of this arrives at the true cost of my insurance being $385/month for family coverage.

She ins interviewing for a job with the county. County benefits cost $165/mo. No nickel and dime stuff like with my plan.

So yea, the LDHP the county (govt) job has is not only a much better plan, but lots cheaper.

But if working for a place that offeres two choices, a HDHP and a LDHP, yes, the LDHP us likely gonna cost a lot more since there is alot less out of pocket through out the year. But makes it trickey when comapring different employers. As I do not know the "true" TOTAL cost of each plan. I only know the portion in which "I" have to pay.

 

[ustmd]

"Plan A is HSA, cost me $4600/yr, employer puts in $2000, max out of pocket is $7000
Plan B is low deductible. Cost me $2000/yr. Max annual out of pocket is $2500"

LD1

If I understand you correctly, your wife may get access to a plan with a premium cost of $2K per year and a Max out of Pocket of $2500 vs your current plan that has a premium cost of $4.6K per year and MoP of $7K

Assuming that is true and it is a true "apples to apples" comparison (e.g. the wife's plan may lock you into a HMO and a gatekeeper), then you need to jump all over your wife's plan.

Assuming that you have a horrible medical year (back surgery and wife needs a hip replaced), the most you would pay under her plan is $4.5K ($2K in premiums + $2.5K in out of pocket). With the high deductible plan, you would be out $11.6K (ignoring your employers contribution to your HSA).

What I am finding amazing is that your wife is getting access to that good of a plan for only $2K in premiums per year.


I am in the high tech industry at a company that is known for have great benefits. We offer a HDHP and a more traditional plan. The exception is that costs are almost reverse of yours. The premiums for the HDHP for a family are ~$2.5K per year with a deductible of $3K. After $3K all medical services and hospital charges are covered 100% and drugs are covered 80% until you get to $5K (combined medical/drug co-insurance) and then plan pays 100%. First year, the employer gives $2K to your HSA and then $1K per year after.

If you want the more tradition insurance, premiums are ~$6.5K/year. there is a $2.5K or 3K deductible and then you go 80/20 until you get to $7K MoP.



For me, the max costs for the HDHP plan is $7.5K year ($2.5K premiums + $5K MoP) vs the tradition plan, I would be out $13.5K.