Anyone with an HSA plan?

[disneysteve]

HSAs are a huge gamble for employees....it does not take much for you to go from being "young and healthy" to "young and needed medical care". And the thing is, there's no way to predict, but if you're feeling lucky, then what the heck, get on the HSA bandwagon.

HSAs will encourage people to skip routing screenings (how much does that mammogram cost? Better know, because it won't be covered), and in the long run will be bad for the country's overall health (just mho).

HSAs aren't instead of insurance, they are in addition to insurance. They are just a way to put aside money pre-tax to pay out of pockets costs. Our health plan coverage isn't changing one bit. We're just adding the benefit of the HSA which will save me money. Now I pay my dentist out of pocket. With the HSA, I'll pay the dentist from my HSA with pre-tax money which will actually save me money.

I'll still have the same insurance for doctors, hospitals, x-rays, etc.

 

[disneysteve]

who know they will have medical expenses each year, HSA's are not a good deal at all, in fact they're pretty scary. They punish people who need the insurance

I'm not following your reasoning. If you know you will have medical expenses each year, HSA's are a great deal. Instead of paying those expenses with after tax money, you can pay them with pretax money which saves you quite a bit.

 

[Tamar]

People are getting HSA and FSA's confused.

With an FSA, you can pay for your current health care costs pre-tax by putting money aside at the beginning of the year.

An HSA is a tax-deferred savings account, and you MUST HAVE A HIGH DEDUCTABLE POLICY to take advantage of it. So, let's say you have a policy where you pay the first $4000 in expenses each year. An HSA would let you put $4K in a tax-deferred account, and if you didn't use it, great, it rolls over into the next year. BUT...your insurance (with co-pays) doesn't kick in until AFTER you've spent that first $4K out-of-pocket.

So...it's a great deal for people who know they won't have high medical expenses or who know they could afford to pay that $4K one year if they needed to (single, affluent people, in other words). Those of us with families, or chronic medical conditions, or who can't afford to put $4K in an HSA, do not benefit.

In addition, if you take the healthiest of people out of the pool paying for regular healthcare by giving them this option, then it makes the "groups" risk higher, and healthcare premiums go up for all the rest of us.

 

[disneysteve]

An HSA is a tax-deferred savings account, and you MUST HAVE A HIGH DEDUCTABLE POLICY to take advantage of it.

This is true, but the definition of "high deductible" is $1000, not $4000. And that doesn't necessarily mean that you have to pay the first $1000 of your care. It depends on the terms of your plan and the type of care involved.

Here are the terms of our current plan:

Deductible: $1000 individual/$2000 family
Max out of pocket $4750 ind./$9500 fam
Doctor visits: $30 copay
Hospital/ER: 50% after deductible
Diagnostics/Labs/X-rays: No charge

So, for example, if I see my doctor and he orders an x-ray, I'll pay $30 for the doctor and nothing for the x-ray. I can use funds from the HSA to pay the $30 doctor copay. Since it was pretax money, it will really only cost me about $20.

If, on the other hand, I have to be admitted to the hospital, I'll pay the first $1000 (my deductible) and then 50% of the bill until I've spent a total of $4750 and I can pay any or all of that from my HSA.

There is no set amount that I am required to put in my HSA. I can put $5/paycheck or $100/paycheck. Its up to me. And whatever money I put in and don't use this year remains in there and can be used next year or whenever and continues to earn interest in the meantime. I really don't see any downside to doing this (and I'm a physician so I'm quite familiar with how the insurance plans work).

 

[elgerber]

So...it's a great deal for people who know they won't have high medical expenses or who know they could afford to pay that $4K one year if they needed to (single, affluent people, in other words). Those of us with families, or chronic medical conditions, or who can't afford to put $4K in an HSA, do not benefit.

This is not necessarily true either. I am looking into HSA's because I am already paying almost $11000 a year through my job for my familys insurance. With the HSA I looked at, the max out of pocket was $3750, and the premium was almost $6000 less per year than I am paying now, and 1 preventative visit per year is covered at 100% with no deductible. I am not single or affluent, just the opposite, and healthcare costs is part of why I am the opposite, but for me this may end up to be a better deal.

 

[Mainers]

An HSA is a tax-deferred savings account, and you MUST HAVE A HIGH DEDUCTABLE POLICY to take advantage of it. So, let's say you have a policy where you pay the first $4000 in expenses each year. An HSA would let you put $4K in a tax-deferred account, and if you didn't use it, great, it rolls over into the next year. BUT...your insurance (with co-pays) doesn't kick in until AFTER you've spent that first $4K out-of-pocket.

So...it's a great deal for people who know they won't have high medical expenses or who know they could afford to pay that $4K one year if they needed to (single, affluent people, in other words). Those of us with families, or chronic medical conditions, or who can't afford to put $4K in an HSA, do not benefit.

In addition, if you take the healthiest of people out of the pool paying for regular healthcare by giving them this option, then it makes the "groups" risk higher, and healthcare premiums go up for all the rest of us.

My two cents:
The key point that you are missing here is that the savings in annual premium for these plans usually covers about 75% of on year's increase in deductible. An average family can roll over money each year with the rates that I am seeing for New England. But there are people (as you mentioned with chronic medical needs) that will have to pay more under these plans.

 

[disneysteve]

My two cents:
The key point that you are missing here is that the savings in annual premium for these plans usually covers about 75% of on year's increase in deductible.

This depends on your current situation. We aren't going to save anything in premiums by adding the HSA. We already have a high deductible plan. Otherwise, we couldn't afford coverage at all. We will be keeping the exact same coverage we currently have. But by adding the HSA, we will reduce our out-of-pocket costs considerably. So our premiums won't go down but our overall costs will. In this case, there isn't anyone who wouldn't benefit from the HSA regardless of their health status.

 

[Tamar]

Yes, DisneySteve, if you already have a high-deductible plan, adding an HSA will save you money. But....yikes, your out-of-pocket family max is $9500/year? Good thing you're a phsyician, so that you can afford a 50% co-pay on hospital stays!

I am definitely biased...10 years ago I would've thought that HSAs were the best thing since sliced bread...before I was diagnosed with a chronic illness, and then a second. I'm here to tell you it can happen to anyone. Now, it's easy for me to see that pulling the healthiest people out of the insured groups, while offering those that can afford to put the most away a new tax shelter, is not necessarily good for Joe general public.

My traditional HMO coverage has $1000/year deductible, with coverage throughout the year, not just after I've drained my bank account. Being forced into an HSA/high-deductible situation (which the current administration thinks is the way to contain health care costs) would really hurt, and I can only imagine if I was making minimum wage or trying to support a family as a single parent.

I guess I don't mind it being an option, but it's incredibly scary that this type of plan might be all that's offered by employers, or that the fact that they're offered at all might make traditional health care completely unaffordable because only high-risk people are left in traditional plan..

 

[disneysteve]

My traditional HMO coverage has $1000/year deductible, with coverage throughout the year, not just after I've drained my bank account. Being forced into an HSA/high-deductible situation (which the current administration thinks is the way to contain health care costs) would really hurt

But a $1000/year deductible plan qualifies as an HSA plan. You could keep the exact same plan you currently have and add an HSA to it. I still don't see how that is a bad thing. Even with your current plan, you still have some out-of-pocket expenses (deductible, copays, OTC meds, etc.). Wouldn't it be better to pay those expenses with pre-tax dollars instead of after-tax dollars?

 

[Tamar]

I misspoke...I don't have $1000 year deductible (I have no deductible). What my plan has is $1000/year max out of pocket. I've never hit that max out of pocket, even the year I had $38K worth of treatment, because the co-pays are a fixed amount, not a %.

I put about $1200/year in an FSA. This year I'm out of money in the FSA already because I had a surprise root canal last month.

I'm not going to argue the downside of HSAs here anymore. Some people obviously see the upsides. Google on some of the federal employee union websites to see the concerns raise by the federal unions and labor groups when the government introduced this for their employees for a more eloquent way to define the issues.

 

[j's m]

I'm an employer in shock. Right now we only pay for ourselves and 1 single employee (thanks goodness his son just graduated college) We have the traditional NJ BC BS PPO plan, 250 deductible, 90% doctor coverage, 80% hospital, 60% drugs.

We just got our bill yesterday for our new calendar year. Almost a 25% increase from last year. For those of you that complain that a small business should cover everybody without charge to the employees, here's the rates:

Single 488.76 PER MONTH
Family 1350.45 PER MONTH

We just can't do this anymore.

Premiums for affordable coverage ARE for the rich. The last time we thought of dropping employee coverage, we found out our rates would DOUBLE. So it's actually cheaper for us to pay for a single employee!

I spent all of last night researching HSA's. We don't have a choice. But as a family with 2 asthmatics, high cholestrol, and high blood pressure, with a son with a solitary kidney that needs 6 months bloods and ultrasounds, what do we do? We also need a plan with UNLIMITED LIFETIME coverage, just in case.

Thanks DisneySteve for starting this thread. Maybe we can get more people with info on HSA's. Soon, our renewal date is 9/1/05.

 

[disneysteve]

I misspoke...I don't have $1000 year deductible (I have no deductible). What my plan has is $1000/year max out of pocket.

That's a whole different situation. I can certainly see why going to a $1000 deductible wouldn't work for you. You are very lucky to have the plan you have.

Personally, however, we simply could not afford a plan like yours. The premiums for a small business would be phenomenal. The monthly family premium for the plan we have is $566. Look at the rates j's m mentions above: $1350/month for a family. No way any of us could do that.

 

[Tamar]

There are two theories to getting health care costs down (not to get too political on y'all). One recommendation is to take the most dire cases out of the system and have a government-sponsored healthcare plan for those people. This should lower premiums for all in the less-than-tragic group that use a regular plan.

The other theory says "if you're healthy, good for you, you're entitled to pay less and to get a tax break", if you're a poor slob who got the short end of the stick in the health department, then forget saving for retirement, you should be spending all your money now, or foregoing some of the fluffy wellness stuff to keep your healthcare costs in line.....". So, you get stuck with a high deductible plan, or a plan that all the healthy people have abandoned, so rates go up even higher. I understand the appeal of that for people who are healthy now (or aren't going to get pregnant, or need surgery), but I just don't think it's right....IMHO.

 

[manchurianbrownbear]

I'm very afraid of the government getting involved in healthcare, but I would be open to a scenario in which people whose healthcare coverage leaves them with extreme out-of-pocket cost are able to get some kind of annual maximum out-of-pocket expense cap through a government plan.

The HSAs that we offer are sold with the understanding that the employer is funding at least 50% of the maximum annual contribution. So our groups are not rolling to high deductible plans and then leaving their employees to fund HSAs on their own.

Could we lower healthcare costs if we all meet at WDW several times a year and disneysteve treats our ailments for free?!?!

 

[disneysteve]

Could we lower healthcare costs if we all meet at WDW several times a year and disneysteve treats our ailments for free?!?!

Now there's an idea. I don't know about free though. Someone would have to cover my travel costs and maybe a Mickey bar or Dole Whip

I think lots of people, myself included, are going to save millions of dollars by enrolling in HSAs. They won't be a good deal for everyone but neither is any other plan. If it comes down to a small business being able to offer a high deductible plan with an HSA or not offer insurance at all, I'd certainly pick the insurance plan. And the way premiums have been skyrocketing, HSAs may be the only thing that keep a lot of people insured.

 

[j's m]

Could we lower healthcare costs if we all meet at WDW several times a year and disneysteve treats our ailments for free?!?!

We would also be able to deduct the mileage or airfare, since you can deduct mileage if you itemize.

I'd even spring for Mickey bars for the whole family!

 

[Tamar]

I'm in if my co-pays are Dole Whips!

 

[CajunDixie]

Of course, if the employer paid for everything, the business would likely go bankrupt in no time.

But with the employees paying 100% of the premiums and him only contributing $1,000 where did all the extra money go? He was paying well over $1,000 per year for insurance when DH started there.

An HSA would definitely save me money. I'd be able to pay all of my out-of-pocket medical expenses with pre-tax dollars. That includes things like dental bills, OTC meds, prescription co-pays, doctor co-pays, etc. The cost of our health plan is going up no matter what. Adding the HSA at least buffers that increase.

With ours there are no "Co-pays" any longer. And yes you can use the HSA to pay dental and visions costs but with ours those things do NOT go toward our $5,000 deductible. So if you're strictly trying to make the HSA "work" for you then you're better off not using the HSA to pay for anything that doesn't get applied to the deductible. Which some of us cannot afford to do.

By the way, if your DH's employer put $4000 into the HSA last year and $1000 this year, that money is still there unless you've spent it all. That's the great thing about HSAs. The money rolls over and earns interest until needed.

We used part of it for extensive dental work for DS12 and for glasses/contacts for DS15 and I. None of which goes toward our deductible.

For those who are struggling to make ends meet or who know they will have medical expenses each year, HSA's are not a good deal at all, in fact they're pretty scary. They punish people who need the insurance most.

EXACTLY!! Not only do I now have to pay monthly premiums but I'm expected to pay into a HSA account.

Here are the terms of our current plan

Key word there is "current" Not only did our monthly premium go up this year but our deductible went up $1,000. I didn't expect there not to be any increases but for the premium and the deductible to go up so much in one year I figure in 5 years our deductible will be $10,000 and the premiums well over $1000.

But a $1000/year deductible plan qualifies as an HSA plan. You could keep the exact same plan you currently have and add an HSA to it.

We couldn't do that without paying way more in monthly premiums not to mention having to fund the account upfront.

The HSAs that we offer are sold with the understanding that the employer is funding at least 50% of the maximum annual contribution. So our groups are not rolling to high deductible plans and then leaving their employees to fund HSAs on their own.

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. Or with rising medical costs what happens if the annual contribution is $2,000 by the employer but never increases? Costs keep going up but the annual contribution will stagnate.

If the government wants to help fix healthcare get rid of MediCaid and Medicare and start a program that is based more on income. My employer has written off thousands of dollars for an x-celebrity that has amble money to pay his bills yet he gets the same benefit as a person that only earned $25,000 a year. Thus making places like my employer need to raise costs because some months we're writing off half as much as what we bring in from payments.

 

[corie161]

We are going to be starting a HSA soon through my employer. Currently full time employees get full family coverage paid for. I work 30 hours so I pay 25% of the premium. Our deductable has been $500. I work for the city and the council elected to go with a $2500 deductible and fund $2000 toward each employees HSA. Even with them funding the $2000 and paying the premium, it's lower than paying the premium for a $500 deductible. 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.

I have worked here for 7 years and the premiums just continue to go up and up. I think the theory on this plan for them was perhaps if the $2000 was there to use and they new they could carry it over John Doe would be taking Little Suzy to the doctor or a the sniffles.

At this point I don't see this type of plan being a problem, however I can understand how it would be difficult for someone to have to fund their own HSA

 

[disneysteve]

I can understand how it would be difficult for someone to have to fund their own HSA

It won't be difficult to fund my HSA at all because it is money I'd be spending anyway. Plus it would now be pretax dollars instead of after tax dollars so I'll actually be saving money. That's the point I think some folks are missing. Having an HSA doesn't cost you anything extra - it saves you money. Any medical expenses that you currently pay yourself out-of-pocket, you would still be paying yourself but with pretax dollars.

For example, my periodontist isn't covered under our dental plan. I see him twice a year and pay $140 each time or $280/year. I need to earn about $400 to take home that $280 after taxes. With the HSA, I only need to earn $280 and deposit it in the HSA before taxes to pay that bill. So I come out ahead by not paying taxes on that portion of my income.