Tell me why I should or should not enroll in a HSA

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wife

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

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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.

Would I be better off with an FSA??

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Would I be better off with an FSA??

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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.

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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Does Obamacare limit or do away with health savings accounts?

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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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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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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?

What kind of rate of return do you get on an HSA?

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.

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.

interesting. I didn't know all this.