Anyone with an HSA plan?

[CajunDixie]

From my understanding we can use the $2000 first and then after that's depleted we would have to pay the $500 deductible and then the insurance kicks in 80/20. We do have child well checks and the like paid for 100% off the bat.

The are talking about making a portion of the $2000 the city pays in to be able to be rolled over to the next year if not used, but putting a cap on that amount.

You need to understand that the $2,000 they put in can be used for expense that do NOT apply to your deductible. So if you use it for a physical and thats not covered you can use the money in the account but it's not going toward your deductible of $2,500. You say you have well child checks paid for....who is paying? You from the account or the insurance company?

They can't put a cap on what is rolled over in your account if it is a HSA. Once that money is in there it is yours to spend (on qualified expenses) or save as you desire. It's not any of their concern what your balance is in your account!!

 

[disneysteve]

You need to understand that the $2,000 they put in can be used for expense that do NOT apply to your deductible.

I'm not so sure about that. The whole point of the high deductible/HSA is that you use your HSA money to cover expenses prior to meeting your deductible. I just e-mailed our broker to clarify this. I just re-read the HSA rules and it doesn't really answer this question clearly.

They can't put a cap on what is rolled over in your account if it is a HSA. Once that money is in there it is yours to spend (on qualified expenses) or save as you desire. It's not any of their concern what your balance is in your account!!

That's correct. Once the money is deposited in your HSA, it is yours and your employer has absolutely no say over what happens to it from there.

 

[corie161]

You need to understand that the $2,000 they put in can be used for expense that do NOT apply to your deductible. So if you use it for a physical and thats not covered you can use the money in the account but it's not going toward your deductible of $2,500. You say you have well child checks paid for....who is paying? You from the account or the insurance company?

That isn't the way it was explained to me but I will definately look into it. I understood that it could be used for any qualified expenses that were paid out of pocket, and after I paid out $2000 I wouldn't get anything reimbursed until the next 500 was met.

They can't put a cap on what is rolled over in your account if it is a HSA. Once that money is in there it is yours to spend (on qualified expenses) or save as you desire. It's not any of their concern what your balance is in your account!!

This hasn't been confirmed yet either. I think the reasoning was that it was their money put into and not the employees money. I'll keep you posted as to what I find out.

 

[corie161]

Ok, after doing a little digging here at work I think they were discussing 2 different things, a Health Savings Account and a Health Reimbursement Account. The paperwork for the Health Reimbursement account states the following:

With Options Blue, you recieve a high-deductible health plan that provides comprehensive coverage. This plan works with an acocunt that can be used to pay for a portion of your health care expenses. You pay for your expenses until you meet your annual deductible. You can use your account to help cover these expenses. Once your deductible is met you pay for a portion until you meet your out-of-pocket maximum.

So this sounds fairly similar to a Flex Spending Plan. This also states it's an Employer - funded health reimbursement account. What I haven't figured out is whether they are telling us we can rollover a portion of this and maybe that's where the cap comes in. The employees haven't officially been explained this yet, just the city administrator, and work in that office so that's where my little knowledge is coming in.

 

[disneysteve]

This hasn't been confirmed yet either. I think the reasoning was that it was their money put into and not the employees money. I'll keep you posted as to what I find out.

From The HSA Road Rules published by the HSA Coalition...from the Rules for Employers section.

"1. The employee owns your contributions to their account as soon as the funds are depositied.

2. The employer can no more restrict the use of the funds in the employee's HSA than they can restrict the employee's funds in the employee's personal checking account."

I think that's quite clear. Once the money is in your account, it is yours and your employer can not dictate how or when it gets spent or whether or not it gets rolled over. They can't take it back.

 

[corie161]

You say you have well child checks paid for....who is paying? You from the account or the insurance company?

Insurance is paying 100%. I beleive it's state law in Minnesota that they are covered.

 

[corie161]

From The HSA Road Rules published by the HSA Coalition...from the Rules for Employers section.

"1. The employee owns your contributions to their account as soon as the funds are depositied.

2. The employer can no more restrict the use of the funds in the employee's HSA than they can restrict the employee's funds in the employee's personal checking account."

I think that's quite clear. Once the money is in your account, it is yours and your employer can not dictate how or when it gets spent or whether or not it gets rolled over. They can't take it back.

After reading the brochure further, the city had 2 options a Health Saving Account in which all the money stays with the employee or a Health Reimburesment account in which the city can decide how to rollover funds to the next year, up to 50% of the original employer contribution, or 100 % of remaining account funds.

 

[disneysteve]

You need to understand that the $2,000 they put in can be used for expense that do NOT apply to your deductible. So if you use it for a physical and thats not covered you can use the money in the account but it's not going toward your deductible of $2,500.

I checked and this is definitely incorrect. Money in your HSA CAN be used to pay expenses that count toward your deductible. In fact, that's kind of the point of the whole plan.

 

[manchurianbrownbear]

Key word here is "understanding" Does the employer sign a contract stating they will always fund 50% of the annual contribution? My guess would be a big NO! Sure the employer may start out paying the 50% but what happens when they are told by their accountant that they are not required to pay 50%? The employer lowers the contribution and the money saved goes back into the company as profit.

This probably doesn't make a difference to anyone unless you have an HSA through Medica Health Plan, but when an employer chooses an HSA with us, they provide banking formation and set up a schedule for funds to be electronically withdrawn each month. So they can't decide to stop making contributions. Other inferior health plans may not make arrangements like this!

 

[CajunDixie]

I checked and this is definitely incorrect. Money in your HSA CAN be used to pay expenses that count toward your deductible. In fact, that's kind of the point of the whole plan.

I guess you misunderstood what I was trying to explain. Yes, expenses you use the account for can go toward the deductible...like when DS went to the Dr for asthma. BUT you can also use the money for "medical" things like contacts that does not count toward the deductible. So she may be paying more than $2,500 in actual costs to make her deductible. It just depends on how she pays for things. When DS had a physical I used the HSA but that did not get applied to the deductible. I just wanted people to understand the money in the account can be used for both items that can be applied to the deductible and those that don't count toward the deductible.

This probably doesn't make a difference to anyone unless you have an HSA through Medica Health Plan, but when an employer chooses an HSA with us, they provide banking formation and set up a schedule for funds to be electronically withdrawn each month. So they can't decide to stop making contributions. Other inferior health plans may not make arrangements like this!

And like any other transaction this can be cancelled. For example, when they raised our rates this year they sent out 3 letters beforehand. First to warn us of a possible raise, second to give us a choice paying way more for $4000 deductible or just paying more for a $5,000 deductible, and a third to return to them with our decision on which option we chose. we have the premiums automatically deducted from our bank account too. All the employer had to do was fill out a new sheet only authorizing a one time $1,000 deposit for the new year. Electronically withdrawals can be changed just like any other payment.

 

[disneysteve]

I guess you misunderstood what I was trying to explain. Yes, expenses you use the account for can go toward the deductible...BUT you can also use the money for "medical" things like contacts that does not count toward the deductible. So she may be paying more than $2,500 in actual costs to make her deductible.

You're right. I did misunderstand you. Yes, HSA funds can be used to pay qualifying medical expenses. Some of those will count toward your deductible. Some won't.

My point is that that is no different than the situation most of us have without HSAs. I have a deductible. Some of my out of pocket costs count toward it. Some don't. The difference with the HSA is that I get to pay those expenses with pretax money which reduces my actual out-of-pocket expenses.

If, like Tamar, you currently have no deductible, than you need to run the numbers to see if an HSA makes sense for you. But going to an HSA plan with a $1000 deductible may still save you money if the premiums are lower and especially if your employer contributes to the HSA. And keep in mind that funding your HSA is voluntary. There is no set amount you have to put in - just a maximum amount you are allowed to put in. Also keep in mind that every $1 you put in your HSA saves you 25 or 30 cents in taxes so it will only cost me about $700 to fully fund my HSA with $1000.

 

[Tamar]

HSAs have their place IMO, they should be available for the self employed or small businesses that would otherwise be unable to offer any health insurance.

My concern is that when they are offered along side traditional health insurance plans in medium/large companies, they will defeat the whole concept of group insurance rates by siphoning off the healthiest members. People who "run the numbers" and won't benefit will find themselves as part of a high risk group by default and premiums will go up significantly. Companies can set it up so they pay less, even if individuals end up paying more, without it being obvious. Politicians are smart, they know that, it's a pro-business decision that is also a good deal for young, healthy upper income people (and some others).

FSAs offer the same tax advantages without being tied to the higher risk (I got that 25-30% break on my first $1100 of health-related expenses this year)....if they would've just allowed a portion of what's put away in an FSA in a year to be rolled over if it isn't used, that would've been to everyone's benefit, without overtly creating a tax-free savings account for those fortunate enough to be able to sock a bunch of money away.

Maybe I'm unrealistic, but I want health insurance, not just catastrophic health insurance. If I can remain a part of a normally distributed group that can happen, otherwise people like me will be SOL soon. And I'm one of the lucky ones...I just might have to cut out trips to Disney. There are others who will soon be choosing between allergy shots and xrays or groceries and rent if the HSA trend catches on.

 

[disneysteve]

siphoning off the healthiest members.

Maybe I'm unrealistic, but I want health insurance, not just catastrophic health insurance.

I guess this is where we differ in opinion. I don't see why an HSA is only good for the "healthiest members." I'm 40 and healthy but I know that on our plan the maximum I would have to pay no matter how sick I got is $4750/year. When you factor in the tax benefit, that is only about $3300. I know lots of patients who spend far more than that due to their chronic illnesses. And I'm also taking a bit of a gamble that I won't be struck by maximum expenses each year which will allow funds to accumulate in my HSA account and be there if and when I do need them.

As for the "catastrophic" insurance issue, we definitely have different opinions there. I think one of the biggest problems with health insurance today is that people expect it to cover every scrape and sniffle. I believe health insurance should be more like auto insurance. My auto insur. doesn't cover oil changes or new tires or transmission repairs. It only covers major stuff like fire, theft, accidents, etc. Health insurance would be far more affordable and available if they would cut coverage of things that really don't warrant doctor treatment or prescription medications. They tried to do this with HMOs but the public backlash was so stong that they backed off what really were very good policies.

 

[Tamar]

Steve~

Does that $4750 include the premiums you pay? Your family max out of pocket is closer to $10K, right? Being a doctor, you probably don't realize how awful having to pay those amounts would be for the average Joe.

And I think anything that keeps people from treating minor things before they become major things is ultimately bad for all of us....more people on disability, or in the county hospitals with no ability to pay...back on the taxpayer, so there goes the savings.

It still might be the right thing for you in your situation, I've never argued that (in fact I agree, you're young, healthy, affluent, plus you are knowledgable about medicine and know when to get tx and can self treat in some cases).

 

[elgerber]

Steve~

Does that $4750 include the premiums you pay? Your family max out of pocket is closer to $10K, right? Being a doctor, you probably don't realize how awful having to pay those amounts would be for the average Joe.

Just so you know, that some of us below average Joe's are already paying over $10k out of pocket every year without the HSA. My premiums alone for my $300 per person deductible family plan through my work are almost $11k per year. That hurts! So, I still don't think HSA's are only good for the healthy or wealthy.

 

[Tamar]

Erika, that's terrible. My point of reference is the 2 plans I have access to:

My husband's (he works for a company with 10,000 employees):
Our premium is $42/week, no deductible, $20/copays for most stuff, 80-90% coverage for hospital and other tx, $1000 per person yearly out of pocket maximum.

My company (600 people) if we used it would cost us $210/month, $750 deductible, $15 co-pays, 80-90% coverage on hospital and other tx, max of $1250/person for "co-insurance" (over and above deductibles and co-pays).

My company went through terribly tough times after 9/11, but they've still made a commitment to offer affordable health care. I'm sorry to hear that there are other orgs that don't. You're right, for you an HSA might look pretty good. For me, it would stink.

 

[disneysteve]

Does that $4750 include the premiums you pay? Your family max out of pocket is closer to $10K, right? Being a doctor, you probably don't realize how awful having to pay those amounts would be for the average Joe.

How I hate that stereotype that all doctors are wealthy and don't know what its like to have bills to pay. Sorry, just a big pet peeve of mine.

As for the insurance, you're right. My premiums (the share I pay) are $378.36/month or $4,540.32/year. Add in the max out of pocket of $4,750 and you get about $9,300. So that is the correct amount for the worst-case scenario. It is better with the HSA though. As I said, the out of pocket comes down to about $3,300 due to the tax advantage so my max would be $1,450 less with the HSA than without it so taking the HSA is a no-brainer for us.

And I think anything that keeps people from treating minor things before they become major things is ultimately bad for all of us

I agree completely. That isn't what I was referring to. I meant people who come to the doctor for things that can be easily (and more cheaply) treated with OTC remedies. For example, patients come in every day for colds. Rather than spend $10 for a bottle of Nyquil, they see the doctor for a prescription decongestant and cough syrup covered by their plan. Or patients with acid reflux who get Nexium or Prevacid for $150/month instead of OTC Prilosec for $20/month. I fully understand that patients do it to reduce their out of pocket costs and I respect that. I just think it contributes to the rising cost of healthcare.

My husband's (he works for a company with 10,000 employees):
Our premium is $42/week, no deductible, $20/copays for most stuff, 80-90% coverage for hospital and other tx, $1000 per person yearly out of pocket maximum.

I hope you realize how very fortunate you are to have access to such cheap coverage. Heck, I'd love to have access to the plan your job offers. The reality is that millions of Americans are employed by small businesses and the cost of care is phenomenal. Lots of small businesses don't even offer coverage and when they do, many employees can't afford to participate. In my practice, one employee has coverage only for herself (paid by my employer) but can't afford to add coverage for her daughter. So I'm well aware of the struggles people face. If HSAs help get more people affordable coverage, I'm all for it.

 

[Tamar]

Steve, I really didn't mean to offend. The average hourly salary is $16.06, for yearly gross earnings of $33,400. Taking the HSA gamble and possibly ending up with $10K in expenses one year for anyone at or below that average would be really tough and it would take years to recover from that. I really don't think doctors (or any other highly paid professional) would have the same worries. (My brother is a doctor, so I know a little bit about the financials of running a medical practice, plus I've seen more than my share of EOBs).

Believe me, I don't go to the doctor for sniffles. Shame on people who do. My insurance (with $20 co-pays for office visits and $20 co-pays for prescriptions) doesn't enourage that over trying an OTC.

I'm glad you've found a health insurance option that works for you. I just hope I don't lose the one that works for me.