Help me understand "Health Savings Plan coupled with a Health Savings Account"

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Posted 2/1/2013 by WingNut in NSBR Board
 

WingNut
Best Cat Evahhh!

PeaNut 18,741
July 2001
Posts: 14,109
Layouts: 200
Loc: Maryland

Posted: 2/1/2013 8:42:33 AM
We've been notified that we will be switching to this kind of medical coverage where I work.

This makes me nervous for one reason: we have finally gotten my son stabilized thanks to his counselor for the past 2 years. Our current PPO coverage allows us unlimited visits for $35 copays. We already pay for group counseling out of pocket ($70 a month) and his psychiatrist out of pocket (she is cash only, she doesn't contract with any insurance company). I'm trying not to panic before I have more details (likely in April, we have a June 1st start to our benefit year).

I already have a high deductible plan and am paying roughly $500 a month for my share of the premiums. I'm just so worried about losing coverage that would impact my son in a negative way.

I understand Health Savings Accounts as I've used a Flexible Spending Account for years. Does anyone know what the limits are for HSA's? I know this year FSA's were dropped to $2500. I already know I'll be doing the full $2500 this year if it's still offered.

So Peas, give it to me...the good, the bad and the ugly.


Joy


JamieMN
BucketHead

PeaNut 142,548
April 2004
Posts: 993
Layouts: 13
Loc: my own little world

Posted: 2/1/2013 8:53:57 AM
Do you have family or individual health coverage?

If it is individual this year is $3250.00. If you have family it is $6450.00

Also, if the HSA account holder is over 55, they are eligible for a catch up contribution of $1000.00 on top of the numbers above

I deal with HSAs for a living. Let me know if you have more questions

JamieMN
BucketHead

PeaNut 142,548
April 2004
Posts: 993
Layouts: 13
Loc: my own little world

Posted: 2/1/2013 8:53:59 AM
Do you have family or individual health coverage?

If it is individual this year is $3250.00. If you have family it is $6450.00

Also, if the HSA account holder is over 55, they are eligible for a catch up contribution of $1000.00 on top of the numbers above

I deal with HSAs for a living. Let me know if you have more questions

eebud
Doxie Pea Mom

PeaNut 52,841
October 2002
Posts: 33,484
Layouts: 25

Posted: 2/1/2013 8:56:06 AM
HSA's have a higher contribution limit than FSA's. $2,500 is the FSA limit. HSA's limits for 2013 are $3250 individual and $6450 Family. The nice thing about HSA's is it is your account and you can roll over what you don't use. You also take it with you if you leave the company. It can be a good way to save for future medical expenses if you don't use all of it every year. If you are 55 or older (I don't think you are but for others that might be reading this) you can put an extra $1000 each year as a catch up contribution. These contributions are total contributions. So, if you company pays some into the account for you, it reduces the amount you can contribute by that same amount.





Hans on left, Bud in middle, Gretchen on right

WingNut
Best Cat Evahhh!

PeaNut 18,741
July 2001
Posts: 14,109
Layouts: 200
Loc: Maryland

Posted: 2/1/2013 9:11:41 AM
Thanks for the info so far. Yes, it would be family coverage...I've always carried our insurance. My husband works construction and the nature of the beast means we'd often find ourselves without coverage due to lack of work (coverage is based on hours worked per quarter; he has had several extended periods of no work in our 23+ years together).

Are the HSA dollars pretax? It will be interesting to see if the company does "sweeten the pot" this first year by contributing monies into employee accounts.


Joy


3Dpea
StuckOnPeas

PeaNut 101,035
August 2003
Posts: 2,309
Layouts: 0
Loc: Fort Worth,TX

Posted: 2/1/2013 9:51:54 AM
LOL Wingnut!

We've been talking about the vagueness of that email in my office since it came out the other day.

I will be interested to see how the details shake out, but yeah, I am a bit wigged out about it too!


~Angie


WingNut
Best Cat Evahhh!

PeaNut 18,741
July 2001
Posts: 14,109
Layouts: 200
Loc: Maryland

Posted: 2/1/2013 11:08:47 AM
LOL Angie! I forget there's another one of "us" on the board. I usually try to keep that part of my life low profile, if you know what I mean.

It's not like I didn't see it coming though, I suprised it hasn't been done before now.


Joy


Burning Feather
I conceived but I can't see you

PeaNut 158,336
July 2004
Posts: 37,887
Layouts: 3
Loc: Ain't no black widow serial killer going to get between me and my man

Posted: 2/1/2013 11:30:11 AM
HSAs can be funded with either pretax dollars or after tax dollars. For example, we thou the t about front loading our HSA with some of our larger emergency fund but since there is a max per year we ended up just funding to the max with pretax dollars. I was sort if hoping to put the max in straight away and then go with payroll deduction from there on out but it wasnt going to work out the way I wanted since it would have maxed us out immediately.


Carla




busypea
boring + nerdy

PeaNut 52,817
October 2002
Posts: 27,974
Layouts: 145
Loc: Oregon

Posted: 2/1/2013 11:39:45 AM
We have had an HDHP and HSA for a few years now and I love it. It does take some getting used to, and it *feels* like it's more expensive because you are paying more out of pocket (rather than higher premiums, which never pass through your pocket ), but at least at my employer, when you take premiums into account, it's not.

Under our plan, our premiums + deductible for the PPO plan are about the same as premiums + deductible for the HDHP plan. However, the premiums for the PPO are MUCH higher, while the deductible for the HDHP is about 4x what it is for the PPO plan. In round numbers, the premiums for the PPO are about $500/mo and the deductible is $500/person (no more than $2000/family). So you are definitely paying $6000/yr for coverage and could pay up to $8000 if everyone meets their deductible. Our HDHP premiums are about $150/mo and deductible is $2000/person (no more than $6000/family). So we definitely pay $1800/yr for coverage and could pay up to $7800 if everyone meets their deductible. (It should be noted that other than premiums and deductibles, the coverage of both plans is identical.) It seems like a wash, so why do I love it? Because the amount we will *definitely* be spending is much much less under an HDHP and that allows a lot more to go into our HSA and roll over from year to year. In essence, after the initial period of building up your balance, you end up with another tax advantaged long term savings stream.

We max out our HSA contribution every year and because we haven't had high usage, we have been able to accumulate a pretty tidy balance in the account. Funds above a certain threshold (I think it varies from plan to plan) are investable and earnings are not taxable as long as they are withdrawn for eligible health expenses. We choose to invest the balance of our account above our annual family out of pocket maximum. That way, we are realizing some growth, but we wouldn't end up in situation where we might have to liquidate investments in the account immediately to pay bills.

HDHPs and HSAs are a very different way to think about healthcare compared to what most of us are used to, but that doesn't make them bad. I am thrilled with our decision to go this route.

JustCallMeMommy
Magical Pea

PeaNut 62,544
January 2003
Posts: 11,672
Layouts: 31
Loc: Brandon, MS

Posted: 2/1/2013 11:44:07 AM

I switched from Flex to HSA this year. The biggest changes for me are:

1) My employer puts some money into the fund.
2) The money is not available until it is accumulated. With the Flex, the whole amount was available Jan. 1. Since January has been an expensive healthcare month for me, I will be able to write myself checks for what I have already spent in healthcare for the next several paychecks, if I choose.
3) The contribution limit is higher.
4) The balance rolls over at the end of the year.


-Jennifer


scrap-tag
PeaAddict

PeaNut 97,528
July 2003
Posts: 1,105
Layouts: 6
Loc: Oregon

Posted: 2/1/2013 11:46:17 AM
So with my HSA - I can use it for all medical expenses. It is not fully funded at the beginning of the year.

With my HSA - I am only elgible for a SFSA (Special FSA) where I can use any of those funds only for dental and vision, until I meet the deductible of my insurance plan.

Knock on wood - I have not met the deductible on my medical plan - so I have to be very careful about how much I put into my SFSA. At the end of 2012, everyone in my family got really nice glasses, becuase I overestimated what we would need for dental in 2012. MY SFSA is fully funded at the beginning of the year.

I am not all that up on how this stuff works - but I also understand - I can only have the HSA, becasue we do not have any other insurance coverage...but I'm not positive about this.

cmpeter
PEAceful Pea

PeaNut 14,521
April 2001
Posts: 37,572
Layouts: 31
Loc: Washington State

Posted: 2/1/2013 12:30:32 PM
We swtiched a few years ago.

I have myself and our two kids on our plan. Dh is on his own through his employer.

My employer contributes $1,100 into my HSA account on Jan 1. I contribute $200 per pay check on top of that. Our deductible $2,400. It takes us about 5-6 months to reach that, but we have the funds in the HSA to cover those expenses. Once we reach the deductible, we have zero co-pays and so far everything has been covered 100%. The second half of the year, my contributions continue to build up and roll over to the next year. It has allowed me to build up a nice cushion in that account.



Cindi
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