Apologies if this should go in the ACA thread, but does anyone contribute pretax dollars to an HSA? Someone told me you can put away up to $6000/year pre-tax and unlike other programs, it’s not a “use it or lose it” plan. I have a call in to our insurance broker to find out more. Appreciate any insights. Thanks
Do you have a HDHP?
Hmmm…not sure what this is…I co-own a small business and we have insurance through Oxford Freedom.
First, you have to have a high-deductible health plan that qualifies you for an HSA. For 2017, HSA contribution limits are $3400 for an individual and $6750 for a family (2 or more people). As a family with no real health issues, we dropped our PPO for an HDHP and started our HSA this year. It’s like getting a 30% discount on my D’s glasses by being able to pay with tax-free money.
Unlike the old Flexible Spending Account we used to have, the HSA money stays in your control and carries over year to year. You do not get a choice of accounts to keep the money in the way you do with a 401k.
@Magnetron – thank you! I think our deductible qualifies (checking on that now). I have another wisdom teeth extraction looming (ka-ching) for Kiddo #2 and this would really help. Thanks!
We are looking into doing this. I went to our local BofA and they had no idea what I was talking about! I found a few places online but am hesitant. If anyone has one, where is it and what are the fees like?
Not only does your insurance have to have the necessary deductible, but it also has to be designated HSA eligible. If your pharmacy benefits have a different deductible than your medical, then you do not have an HSA eligible plan.
The company I work for used to use Wells Fargo but switched to Alliant. It’s just a debit card you use for health care expenses. I do not yet have enough money in it to justify the cost and trouble of looking into mutual fund investment options.
We have and love this program. We put in $600 a month which keeps us ahead of the game. They gave us a visa card so when I went to pick up my new glasses or to the dentist I just hand over the card and pay the bill.
I use Inland Bank. Google them. They have free HSA accounts and give you a debit card as well. They pay minimal interest as well. Call the insurance company and confirm that your plan is an HSA eligible plan. You don’t want to deal with IRS paperwork if you contribute and it isn’t.
I’m sure mine is - it’s in the plan title . Thanks for the name , I will google Inland Bank.
"I co-own a small business "
I would check and make sure you are eligible even if it is available. there is a chance owners especially in an s-corp can not participate. I am not sure but double check that you are allowed even if it is available.
I love having an HSA. We use it as a savings plan for retirement health care costs. Ours is through H’s employer. We were upset when insurance moved to a HDHCP, but the HSA makes it work out well. The issue I see is for people who do not have enough saved to be able to cover the deductible if it occurs early in the year (this is why we started leaving money in the HSA … then it just became a habit of not reimbursing ourselves for health care costs so we could build up the account for later).
If you are 55and over you can add an additional $1,000 catch-up contribution
We have an HSA and we can choose from a variety of funds where we can invest the money as it sits there waiting to be used for healthcare costs.
the one program you as an owner should add is supplemental gap insurance. this is not aflac. it covers the gap if you are hospitalized, 100 % of deductible charged for diagnostics tests, and 1/2 of surgery costs if you are not hospitalized. it is very cheap and employees/owners love it! we started to offer it 3-4 years ago at the company i work for and it is amazing.
https://www.transamericaemployeebenefits.com/Products/Health
Out-of-Pocket Medical Expense (GAP) Insurance
5th 1 on the list.
I am super impressed by the ease of use, they always pay nobody has come to me with an issue or denial etc…and the employees love it (my boss too…since he pays the bill I guess that is most important)
We are doing HDHP and HSA for the first time in 2017. My company benefits VP said it is definitely the way to go. Our company gives us some bucks to get started, which is nice. I think I will like it and it will change behaviors as far as choices in medical care. For example, I’m not automatically trotting off to see one specialist in January (eye stuff) just because I got a notice to make an appointment because I am under the care of another specialist (higher up the food chain) who I just saw last month. It would be a waste of time and money.
I have seen the exodus of my clients being placed in HDHP and we’ve had one for 4 years. By design, they usually make the insured more sensitive to medical costs. I sort of worry about this in the long run, on a societal basis. I know we certainly have put off non-emergency issues that we would not have previously.
Personally, I really like the HDHP and HSA combination, as we are benefiting from any money left over in our “medical insurance” kitty. A lot of Americans don’t bank the difference in premiums into an HSA though and a couple of ER visits/unsuspected illnesses seriously harms those who live paycheck to paycheck.
I have an HSA and pre-fund the full amount I am entitled to in January or February each year. I opened an HSA the first year they became available - maybe 2004 (?) – so I’ve accumulate quite a lot over the years. I do use the account, but I usually have only a few hundred dollars of out of pocket medical expenses a year. Dental tends to be higher, an I can use the HSA for that, as well as optometry. It can also pay for things that aren’t covered by my health insurer, such as chiropractic or, in theory, out-of-network medical services. (In practice I stay within network, because I’m paying more than I need to for an insurance policy with a good network).
My account is with HSABank which is an online bank and one of the very few options way back when I started – no fees after a certain minimum balance. It pays interest, and interest rates scale up with the balance – it’s also possible to set up an investment account. I don’t want to do that, but I know some people who don’t really need the HSA to cover medical expenses do essentially take advantage of the law to create a tax-sheltered investment account.
The money put into an HSA is also an offsetting, AGI-reducing tax writeoff. This is particularly important to me because I am at the cusp of eligibility for ACA subsidies. If I maximize all writeoffs, including the HSA – I qualify – and at my age and premium level that’s worth about $8000 a year. Without the HSA, my AGI would be too high for the subsidies. So basically I stick $4400 into an account that is entirely within my control, and I pay a $370/month premium for insurance instead of $1020 a month. Because of the ACA quirk, I am essentially getting $2 for every $1 I put into the appropriately-designated account.
Anyway, I love my HSA. I’m loving it more the older I get. At age 65 there are no limits in withdrawals – it’s just like any other retirement fund, sheltered if I want it to be, but easily accessible if necessary.
I have an HSA with State Farm Bank. There is a $25-30 (can’t remember which) annual fee. Like calmom, I am on the cusp of the ACA subsidy, so I started this account to reduce my AGI. I do not contribute each year (I upped my 401k contribution instead) but I deposited a lump sum two years ago. I rarely go to the doctor and have spent most of my HSA on routine dental visits (no dental insurance) and vision care. I love it. It’s like prepaid health care. I just pay with my HSA debit card and it’s almost like it’s someone else’s money since it doesn’t come out of my monthly budget!