<p>Just saying…</p>
<p>We’re self employed–own a retail store. We pay for our health insurance (family of 4) and our one full time employee’s health insurance. The total cost—$2,000/month.</p>
<p>NYS- do you use an HSA? It is usually cost effective for a self employed person</p>
<p>We live in an area where we really have to be careful about the Health Insurance we buy.
Unless we want to drive hours away, we need to be aware of which health insurances the majority of the doctors within an hour’s drive will accept.</p>
<p>We used to have United Health Care–Oxford Insurance. As of Nov. 1, 2010, they were going to up their premiums so much that it would have cost us an additional $6,000/yr. Imagine a $6,000/yr increase! As a result, Nov. 1, 2010, we went back to Empire BC/BS. We could have gone cheaper with higher deductibles and less coverage, but we didn’t want to reduce the level of coverage. We want the security of knowing that our health insurance will cover our needs. We also don’t want to be cheap with our employee. We appreciate good employees and treat them the way we would want to be treated. The health insurance is paid through the business and as of now, the business does well enough to pay the expense. However, I can totally understand why many businesses are re-evaluating their ability to continue providing health insurance for their employees.</p>
<p>If you compare a low deductible plan to an HSA you might find your spending the same, but with different results.</p>
<p>For example, if a major medical 80/20 plan costs a single 50 year old woman $5000 annually and an HSA plan costs her $2000 a year, plus she can put $3000 into her HSA account, she is out of pocket the same $5000. BUT, she can use that $3000 for things that are not covered by that major medical plan, for example, dental, ortho, Rx, etc. If she does not use the money that year, it rolls over. If she does not use it by age 65 it can be used for an IRA and also to pay for medicare supplement coverage.</p>
<p>So, in either case she is out $5000, but in the second case she has more control of that $3000 and how it is used. With the major medical, that money is gone, with the HSA it may carry forward and cover other expenses.</p>
<p>Just a thought 
though I do find that people who have always been on major medical find it very difficult to get into a comfort zone in thinking about the HSA.</p>
<p>Thanks for info. I’ll pass it on to my H. Knowing the way his mind thinks, he’s going to want stick with the more traditional major medical coverage.</p>
<p>Not all self-employed folks can set up a HSA. Who know? We found this out when we looked into it and found out that in our situation, it’s not allowed. Bummer for us.</p>
<p>Book- mind sharing what the rule was that disallows some SE people?</p>
<p>My son is self employed. He has an individual health insurance policy but could not do a HSA.</p>
<p>According to our accountant, when you make more that a certain amount (not sure if that’s gross or net), you are ineligible for a HSA. Seems unfair to me. </p>
<p>Our insurance broker tried to set us up with a HSA, but our accountant had to explain the law to him as it pertains to HSAs and showed him why we are not able to have a HSA. Sorry but I don’t know what exactly the law is that she is referring to. Whenever I hear our accountant talk, I tend to get lost pretty quickly. And I am so glad that she understands tax law so that I don’t have to!!!</p>
<p>add in contributions to a HSA are tax deductible and the example above looks even better.</p>
<p>bookreader: I would check that again; never heard of income limits on HSA’s…</p>
<p>^ I agree, I don’t think there are any income limits…quick google search:</p>
<p>Are there HSA income limits?
There are no income limits to qualify for an HSA, and your contributions do not need to come from employment earnings. You can make deposits from personal savings, dividends, and unemployment or welfare benefits.</p>
<p>I am opening a HSA for the first time this year. The main restriction I am aware of is that your insurance plan has to follow pretty strict guidelines for you to be eligible. A High deductible ($1200 if you have individual coverage, $2400 if it is family), Can’t have different deductibles for out of network providers, certain preventatives must be covered, a maximum out of pocket ($5950 for an individual plan, $11,900 for a family plan) etc etc. It has some other weird rules, like my husband can’t have one because he is retired and on medicare, but I can still pay some of his expenses out of mine.</p>
<p>I’m not aware that there are income limits though.</p>
<p>I think the main restriction is the insurance policy you have. We went back and forth deciding whether to go for the high deductible HSA eligible plan and the slightly more expensive lower deductible. Went for the higher because I know I have some dental work I have been putting off that has now reached emergency status, and the HSA can be used for that. (We can put around $7k in as there is myself, my daughter, plus I am over 55 so I get to put the extra $1000 extra in).</p>
<p>I’ll have to ask her again. I must be remembering the reason incorrectly.</p>
<p>Maybe you can do it, but the contribution is not tax deductible???</p>
<p>I had a quick look at the IRS 969 publication and don’t see any income cut offs for getting the tax break.</p>
<p>Blaargh - another IRS publication to wade through. Like IRS 970 isn’t mind boggling enough on its own.</p>
<p>Bookworm, it could have been that the plan wasn’t compatible with an HSA. I switched over to an HSA plan this year at work… plus my company contributes 400 bucks towards the HSA account for me. Sold! If anyone ever has any INS questions feel free to PM me them, I’d be happy to help…</p>
<p>Heard back from my accountant:
HSA plans are used in conjunction with high deductible group insurance plans.
A high deductible plan has a annual deductible minimum for family coverage of $2,300
There is a monthly test to meet. You can not have any other health insurance.</p>
<p>Evidently, the kind of health insurance we have as self-employeds can not co-exist with a HSA.</p>
<p>Health insurance offerings are different by state, but in my state, i can go to the BC/BS website and check the premiums for all the plans at once, including both HSA & others. There are high deductible plans for HSAs and not for HSAs.</p>
<p>If you have a low deductible plan, then the evaluation would be the premium for that plan versus the premium for the HD plan + the cash into the HSA account. Assuming those are the same, for purposes of argument, the question then arises- do you use all that benefit each year? Or are you better off with the money in your account.</p>
<p>For example, my deductible is $5500 and my OOP is $10-11k. Normally, like over the past 20 years, I don’t come anywhere close to meeting my deductible. As a matter of fact, other than the covered with no deductible annual check up, I don’t even make claims, I just pay cash for Rx renewals (I am by Canada so just go to walk in clinics for ongoing meds) so I have used little of that HSA deposit for items that would have been covered by a lower deductible plan. I have though paid for 6 sets of braces (phase I&II x 3 kids) plus wisdom teeth, plus other dental, plus co pays for kids visits to school health centers, etc.</p>
<p>FOR ME, I am way money ahead to spend as much as possible of that insurance budget in the form of HSA deposits and use that money for other allowed expense reimbursement.</p>
<p>I had surgery this year, MRIs/CTscans/Ultra Sounda/ER/Oncologist/etc. On my first visit to the ER we met the deductible, luckily it was early in the year! And it was sitting there in the account available for that purpose. We have used our HD HSA plan this year just like a ‘normal’ person, with doctor visits for several little things, as we did meet the deductible and had 90% coverage after that. (we did also about hit that $10k+ OOP, thank God for the accumulated funds in the HSA account)</p>
<p>Book- you might check the rates as see where your family is money ahead.</p>
<p>BTW- as a self employed person both your premiums and your HSA deposit come off your tax return above the line, reducing your FAFSA/Profile AGI, which might make a huge difference for some families.</p>