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

[teejk]

Thanks guys. Got the same sorts of confirmation this morning with our HR manager.

Not to shift gears and risk this turning political, but never understood the need for a penalty on the HSA or a 401k?

Sure, I understand its pre-tax money that goes in, destined for a specific use and if used as designed will result in the tax break, ........but if on hard times, or just wanna pay off a loan/mortgage......shouldnt the tax be all thats owed? Cause if you DIDNT put money away in HSA or 401k, paying income tax is the only additional expense you would have.

But trying to do the right thing by saving/contributing, then maybe needing some, not only do you owe taxes, but get penalized as well? Just dont see the logic behind it?

I think the "dirty little secret" behind the IRA/401k penalties is that years ago the long-term solvency of the Social Security system was in doubt (still is). Giving people a tax advantaged means of having something else in the event the SS system ran out of money (it is a Ponzi scheme after all) was the purpose. No coincidence that the penalties kick out at the same time that one could take early SS benefits. As for the HSA...a lot of people now qualify for the standard deduction under the tax code so would get no benefit for medical expenses unless something really bad happened. Given the fact that medical care is pretty high on most people's priority lists, Congress decided to add the HSA to the menu of "pre-tax" items in the so-called cafeteria plans. It is meant for medical items only...

 

[NorTracNY]

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.

OK, now I understand. You're not comparing two plans offered to you. Anyone that has a job that offers a HDHP and a low deductible plan will have a significantly lower cost for the HDHP. You are comparing your situation where you have a HDHP at a normal workplace with a plan offered by a government agency. That's a no brainer. Just thank all your tax paying neighbors for the winfall like I do when I got my solar panels.