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TigerTatorTots
New Orleans Pelicans Fan
The Safeshore
Member since Jul 2009
75095 posts

School me on HSAs
Smart to have?

Pros/cons?

I'm 26 with a the highest deductible plan BCBS offers ($700 annual deduct) through my company since I haven't been to a doctor in 6 or 7 years.


LSUFanHouston
LSU Fan
NOLA
Member since Jul 2009
18252 posts

re: School me on HSAs
quote:

Smart to have?


If you have a HDHP, absolutely.

quote:

Pros/cons?


There are no cons to having an HSA.

The question and analysis comes, do you want to have a HDHP or a more traditional plan? If you are young and healthy, HDHP is probably way to go. Aim to save up enough in the HSA for a deductible.

quote:

since I haven't been to a doctor in 6 or 7 years.


You get a free annual exam a year. Go take advantage of it. Just to make sure everything really is in good working order.


TigerTatorTots
New Orleans Pelicans Fan
The Safeshore
Member since Jul 2009
75095 posts

re: School me on HSAs
quote:

If you have a HDHP, absolutely.

Does that stand for High deductible health plan?

If so, I have the highest deduct that my company offers- $700 annual deductible.

I guess that means I need to come $700 out of pocket in a given year before insurance kicks in right?


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foshizzle
LSU Fan
Washington DC metro
Member since Mar 2008
40599 posts

re: School me on HSAs
I've had one for about five years now. I think it's a great deal if you have the extra income to fund it - it offers all the tax advantages of a traditional IRA or 401(k) with the added benefit that you can spend early for qualified medical expenses. And if you don't, you'll almost certainly need to when you hit retirement age anyway.

Plus, most employers have some sort of matching plan. Always take advantage of those, that's a guaranteed 100% return right up front.


TigerDeBaiter
LSU Fan
Member since Dec 2010
7919 posts

re: School me on HSAs
Surely you forgot to type another zero??


LSUGUMBO
New Orleans Saints Fan
Shreveport, LA
Member since Sep 2005
6205 posts

re: School me on HSAs
$700 deductible may not qualify for an HSA. Check with your benefits coordinator before you open one


TigerDeBaiter
LSU Fan
Member since Dec 2010
7919 posts

re: School me on HSAs
It doesn't.


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TigerTatorTots
New Orleans Pelicans Fan
The Safeshore
Member since Jul 2009
75095 posts

re: School me on HSAs
Nope

BCBS Core Basic PPO is the highest annual deductible/cheapest plan offered. $700 annual deductible.

Looks like I don't qualify
This post was edited on 2/10 at 9:01 pm


LSUFanHouston
LSU Fan
NOLA
Member since Jul 2009
18252 posts

re: School me on HSAs
You have a PPO that doesn't qualify.


TigerTatorTots
New Orleans Pelicans Fan
The Safeshore
Member since Jul 2009
75095 posts

re: School me on HSAs
As is expected, I know nothing about health insurance

The last time I used insurance, I was on my parents plan so I didn't have to do anything


matthew25
Ole Miss Fan
Member since Jun 2012
9425 posts

re: School me on HSAs
Hannity is always talking about the Republicans substituting HSA for ACA.

I don't understand his logic. Not trying to start a poli fight.


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Anfield Road
Mississippi St. Fan
Liverpool Fan
Member since May 2012
1685 posts

re: School me on HSAs
To me, HSAs are the best tax advantaged vehicle you can find. You can potentially not pay taxes on any money going into an HSA (provided you spend on a qualified medical expense). Furthermore, after age 65, an HSA is treated like a traditional IRA for non-medical related withdrawal (no 20% penalty).


PurpleAndGold86
Member since Jun 2012
11036 posts

re: School me on HSAs
quote:

Furthermore, after age 65, an HSA is treated like a traditional IRA for non-medical related withdrawal (no 20% penalty).


IRAs don't have a 20% penalty either.


swanny297
LSU Fan
NELA
Member since Oct 2013
2106 posts

re: School me on HSAs
$700 isn't a high deductible - if your looking for tax advantages you would be better off maxing out an FSA just make sure you spend it all - your health plan probably won't qualify for an HSA, and it also has to be offered through your employers benefits to enroll.
This post was edited on 2/11 at 7:58 am


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LSUEEAlum
LSU Fan
Member since Oct 2013
662 posts

re: School me on HSAs
Yeah mine gives me $1000 a year and I contribute $2600 a year. Only been in it for 2.5 years and already got 6k saved up and that's with me taking $2500 out last year for my lasik surgery. I have a wife and child and I still find it to be worth it.


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Anfield Road
Mississippi St. Fan
Liverpool Fan
Member since May 2012
1685 posts

re: School me on HSAs
quote:

IRAs don't have a 20% penalty either.


HSAs do if you take a non-medical distribution before the age of 65, which is higher than a traditional IRA (10%). However, at age 65, non-medical distributions from an HSA and an IRA are treated the same.


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xenon16
LSU Fan
Metry Brah
Member since Sep 2008
3371 posts

re: School me on HSAs
Sorry Tots. PPO isn't eligible. Its not a HDHP


LSUFanHouston
LSU Fan
NOLA
Member since Jul 2009
18252 posts

re: School me on HSAs
quote:

To me, HSAs are the best tax advantaged vehicle you can find.


Annuities are tax-favored: you pay taxes going in and coming out, but the earnings grow tax-deferred.

IRAs and other qualified plans are double tax-favored. Growth is tax deferred, and depending on the plan, money going in or coming out is tax free.

HSAs are triple tax-favored. Earnings grow tax-deferred, tax-free money going in, and if the money is used for medical expenses, it's tax free coming out.

The rub is you have to have enough money to fund it, and enough time to let it build up.

That's what caught me a few years ago. Wife's school district forced everyone onto an HDHP. $5,000 family deductible, district put in $1,000, and we set up to put in $333.33 per month.

Three weeks into January, kid ended up in the hospital for two days, $17,000 bill. Met entire deductible, the HSA had $1,333.33 in it, so had to write a check for $3,666.67. Then, had to pay another $2,400 in co-insurance for the 20 percent due (our out of pocket total including deductible was $8,000).

Didn't pay much for medical bills the rest of the year, but that made a huge dent in our savings. They did let us continue to turn in proof of medical bills to the HSA each month, so even though our contributions continued, we pulled them right back out and put the cash into savings.

Eventually, we were fine, but that was a heck of a shock to the finances at first.

What really sucked is, if our old PPO plan would still have been available, out total out of pocket cost would have been $600 - $250 per day for the hospital, plus another $100 in doctor co-pays.


Feed Me Popeyes
LSU Fan
Baltimore, MD
Member since Apr 2008
2104 posts

re: School me on HSAs
agree with most of what has already been said - would like to add that HSA contributions are subtracted from your gross income, lowering your FICA taxes. For a typical wage earner, this is one of the only ways to lower FICA. Just another benefit to HSAs


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TigerTatorTots
New Orleans Pelicans Fan
The Safeshore
Member since Jul 2009
75095 posts

re: School me on HSAs
No problem. Glad to learn a little about HSAs now. Didn't know anything about them before this


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