Tell me why I should or should not enroll in a HSA
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Tell me why I should or should not enroll in a HSA
Posted by Golfer on 10/2 at 9:43 am
Here are the basics:

- I'm on my employer's plan. Rarely see a doctor. My out of pocket healthcare expenses in the last 2 years (including dental) are less than $300.

- My wife is on her parent's plan until Mid-2013. In a given year our out of pocket health care expenses for her are approximately $1500-$2000.

- We do not plan on having children in the next 2 years.



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Posted by TigerDeBaiter on 10/2 at 9:58 am to Golfer
quote:

wife


quote:

out of pocket health care expenses for her are approximately $1500-$2000


Essentially you can pay for these expenses with pretax dollars. That is the main reason right there.

Aside from that, HSA can be used as an additional Roth IRA (sort of). It's pretax dollars, tax free earnings, and tax free distribution (for qualified medical expenses) The way I look at it, you can pretty well count on having medical expenses at some point in your life, especially when you get old. After age 65, you can also take the money out without the 20% penalty, but you still have to pay income tax, as you would on a traditional IRA.

I have a feeling these are not going to be around very long, which is sad, because I think it offers lots of value and choice for insurance plans. Go figure though. I would take advantage while you can.



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Posted by medtiger on 10/2 at 10:55 am to TigerDeBaiter
quote:

TigerDeBaiter


Nailed it, IMO. If you can spare the income to put away in an HSA, it's almost a no-brainer for the tax deduction now, the tax free distribution for the little medical expenses you have, and the IRA possibilities aforementioned. The only downside is having to put away money now for future expenses if you can't really afford to.



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Posted by Golfer on 10/2 at 11:29 am to medtiger
Would I be better off with an FSA??




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Posted by Zilla on 10/2 at 11:44 am to Golfer
an HSA is the most desirable form of retirement savings there is


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Posted by medtiger on 10/2 at 12:17 pm to Golfer
quote:

Would I be better off with an FSA??


FSA is usually a use it or lose it deal. If the end of the year comes and you don't spend the money, it's gone.



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Posted by CHSBears on 10/2 at 12:55 pm to Golfer
I think you might have to have a HDHP (High Deductable Health Plan) to be able to have a HSA (health savings account) and the person with the HDHP also has to be the owner of the HSA.

I do have both.


This post was edited on 10/2 at 12:56 pm

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Posted by CajunAlum Tiger Fan on 10/2 at 2:09 pm to Golfer
I switched to an HSA with my employer in January of 2009. Each January, they fund the account with $2900, then they pay a portion of the premium on a $6,000 deductible, $6,000 max out-of-pocket plan. I pay the remainder of the premium and also contribute $2900 to the HSA over the year. Even with my wife and 2 kids, on the plan, the account presently has over $13K in it.

The company provided a "simulator" to plug in different scenarios to help make the choice and there were no scenarios where this wasn't a better deal for us. It has worked out even better than expected.



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Posted by tigerrocket on 10/2 at 2:38 pm to CajunAlum Tiger Fan
Does Obamacare limit or do away with health savings accounts?


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Posted by CajunAlum Tiger Fan on 10/2 at 3:10 pm to tigerrocket
quote:

Does Obamacare limit or do away with health savings accounts?


That's a good question that still needs to be answered. There is debate on whether an HSA plan qualifies as "insurance" the way the Obama plan defines/calculates it. I'm not sure on the specifics. Without some sort of legislation, the HSA option may become more expensive. I believe there was a Forbes article on this earlier this year.

IMO, the HSA is what insurance is supposed to be: You take care of life's minor health expenses on your own, but have protection from a catastrophic event. It's a shared risk product where personal accountability plays a role.




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Posted by ynlvr on 10/2 at 4:47 pm to CajunAlum Tiger Fan
quote:

IMO, the HSA is what insurance is supposed to be: You take care of life's minor health expenses on your own, but have protection from a catastrophic event. It's a shared risk product where personal accountability plays a role.


CajunAlum, you are spot on. Why couldn't the current deciders in Washington grasp this concept and build on it instead of the wasteland that is ObamaCare?



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Posted by Zilla on 10/2 at 5:11 pm to CajunAlum Tiger Fan
Cajun, if you can afford to not take out of your HSA, and you are interested in retirement money, I'd save it all!


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Posted by urinetrouble on 10/2 at 7:34 pm to Zilla
What kind of rate of return do you get on an HSA?


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Posted by CajunAlum Tiger Fan on 10/2 at 7:46 pm to ynlvr
quote:

CajunAlum, you are spot on. Why couldn't the current deciders in Washington grasp this concept and build on it instead of the wasteland that is ObamaCare?


I could give you my answer, but that belongs on the political board!




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Posted by RedStickBR on 10/2 at 8:07 pm to urinetrouble
Let's back up a second ... these funds aren't actually investable are they (as that would seem completely absurd)?

Assuming not, you need to weigh the tax advantages and lack of protection against inflation against whether you think you could more than offset the effects of both investing on your own.




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Posted by urinetrouble on 10/2 at 8:14 pm to RedStickBR
quote:

Let's back up a second ... these funds aren't actually investable are they (as that would seem completely absurd)?



That's why I asked. People are calling them alternatives to Roth IRAs.



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Posted by CajunAlum Tiger Fan on 10/2 at 8:17 pm to urinetrouble
My account is with Optimhealth bank and once you reach the "investment threshold", the money is investable.

LINK /


Any return is better than pissing it away on insurance premiums for a service I may not need for 20 years.


This post was edited on 10/2 at 8:25 pm

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Posted by Zilla on 10/2 at 10:40 pm to urinetrouble
yes they are ...i just moved my big hsa over to hsabank.com ....i can invest in individual stocks ...hsa are tax advantaged going in and coming out ...#1 retirement savings vehicle before roth, 401, etc


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Posted by I Love Bama on 10/2 at 11:15 pm to Zilla
interesting. I didn't know all this.


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Posted by Zilla on 10/2 at 11:39 pm to I Love Bama
google it for some great articles


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