@Thumper, if your son is earning $45000, and has a $5K deductible on his HDHP, and has no other coverage, he would be eligible to contribute to an HSA plan on his own. Friends of ours have an older child who is working and enrolledl in his employer sponsored plan - which has a $4K deductible. He is earning 55K, and is living with them at home, trying to save for his own home purchase. Since he is single, he was shocked at how much his taxes would be. Even with maxing out his 401(k), he was still paying a lot in taxes - his marginal rate was still 25%. His parents loaned him $3350 last December, so he had the cash to open up an HSA on his own.
Calmom is correct. Just because you have a high deductible plan does not mean you have an HSA-eligible plan. In an HSA-eligilbe plan, for example, there is no separate deductible for drugs - your drug costs are subsumed under the same deductible as your doctor/hospital costs. In CT, there are HSA-eligible plans on the exchange, I don’t know about other states.
Need to check how it works in the individual state.
I believe the IRS sets the rules on what’s HSA-eligible.
But individual states can have oddities about what’s available and to whom, what’s considered “qualified.”
I have always had health insurance for my family and use an HSA. I WISH it was still $5K, the way it was at my old job, but it’s currently $2,600 and I use it up and more each year.
Next month, my D is aging out of my health plan. Last year, oldest son aged out but went onto federal government coverage through his employment with USPS, so I really didn’t have to do anything. My D, however, is going onto a high deductible plan. She told me that the deductible will be $6,500 but she is going to get a card that will cover the first $4,000 or $4,500 through her employer and, should she reach that level, the rest would be on her. I am not sure if the money will be out of pocket or if she will be contributing to an HSA through her earnings. She makes in the low 50’s. Now, however, thanks to this thread, the discussion about the deductible has me wondering if I should keep her on my plan through COBRA till the end of the year. I am not sure if her plan year starts in November or January. If it’s November, no problem. If it’s January, well, I have met my family deductible this year, though not the complete out of pocket copay limit (1k and 5k), so it might pay to keep her on and let her get whatever she needs to have done. COBRA is $700 per month. I would ask her to contribute what she would pay to her plan for those two months towards it, which seems fair.
I am definitely going to COBRA her for dental. I know that somebody on the forum told me that there is no COBRA for dental, but the paperwork from my employer asks if I am going to keep her on COBRA for dental. It’s $16/month and I pay it for my son as well.
I read the link up top about HSA’s and have to do more research about them. I am curious as to whether or not my D gets to keep or carry over the money contributed to her account by her employer if she doesn’t use it each year. Thankfully, she is healthy, but we all know how quickly life can change.
Each plan is different when it comes to coverages. When I worked for an insurance company and my daughter was on my plan, I was only able to cover her for medical, no dental or eye, because it was minimum required by law. I now work for a different company and I am able to cover her for everything.
@techmom99 - If your D is eligible for and contributes to an HSA, that money is hers, if she doesn’t use it this year she can use it in future years.
As for your own plan, wen you say “its currently $2600” and you wish it was $5k - are you talking about the amount the employer or the employee contributes? If you have family coverage under an HDHP, you can contribute a total of $6750 (in 2017) to an HSA. If your makes a contribution on your behalf, you can still contribute the rest on your own - either to that same HSA account if it allows it, or you can set up your own account. And, if you are over 55, you can make an additional $1000 in “catch up” contributions to an HSA.
As for COBRA, I don’t think a dependent who reaches age 26 is eligible for COBRA continuation, but your employer’s plan may be more generous than what is required (which it sounds like they are for dental) But that being said, some employers set up COBRA members under their own account, so they have their own deductible, without the benefit of the family deductible They may or may not have the deductible carryover - it depends on the plan
Adult children who age off their parents’ plans are eligible for COBRA for 36 months:
https://www.cobraguard.net/tools/cobra-quick-tips-age26-rule
There are Flexible Spending Accounts (FSAs or FSAPs) that cover medical expenses, but are not part of an HSA used for HDHPs.
DH has an FSA through work (like what techmom99 describes), and I had one through my previous job. We both put in $5k and went though it all (and more) every year. It was use-it-or-lose-it by 3/31 of the next plan year, unlike the new HSAs. The $2600 limit stinks.
S2 turns 26 and we have to decide whether to COBRA. He has a job with medical insurance now, but it’s not a qualified health plan. He is still on our plan. He plans to leave the country around his birthday to be an expat for a while, and I don’t think a state medical plan is going to cover him overseas. COBRA is going to be really pricey, but I suspect we really won’t have a choice.