health savings account

[cydswipe]

Can someone start off with the very basics of explaining a health saving account? I think I understand, but having a hard time explaining it to someone else....

(maybe I don't understand, then, huh!?!?)

 

[musicluvr40]

I can explain how our Health Savings Account works. Keep in mind that depending on your carrier it could be different. We have been on a high deductible health savings account (hsa) for several years now. We have a $4000.00 deductible each year. Our employer gives us a certain amount of money towards that, and then we are able to determine a specific amount that we want taken out of my husband's check every two weeks to contribute. We try to get to the point of having the $4000 by the end of the year.

When we go to the doctor for anything that is preventive (physicals, preventive health care) it is free. No co-pay no money owed by us. When we go to the doctor and someone is ill we still have no co-pay. The doctor sends us a bill for our portion of what the insurance company would have paid. We pay the doctor out of our health care money. If any office visit would have been $100 but our insurance would only have paid $40 we pay $40.

The same goes for prescriptions. When we pay for those we pay the insurance company's price. Eye exams are preventive, and we are able to pay for glasses and contacts from our hsa money. We also have a dental plan, and any overage that we owe can come out of our hsa money.

You are able to use your hsa for medical expenses. Here is how we justified our decision to switch to it from the traditional plan. We were paying over $100 a month for healthcare (I know, that's a good price), and then we would still have to pay prescription co pays, doctor co pays, glasses, contacts, and dental overage. With the hsa we use that money that is a part of the $4000 to pay for those things.

Once we hit the $4000 everything is free that is considered going towards that deductible. Glasses, contacts, and dental do not go towards the deductible. One year my daughter had a tonsillectomy, and we still did not hit the $4000.

Since we went on the HSA in 2008 we have been able to use what is being taken out of my husband's check for healthcare costs. We have had no other out of pocket healthcare expenses, and we have saved a ton, especially since we have two contact lens wearers and one additional glasses wearer in our family. Any money left at the end of the year rolls into the next year.

This might be too much information at once. It is a lot to process, and there are different levels available for family and single situations. We talked to a lot of people before we made the change. I will also tell you that we are a healthy family, we are on no regular prescriptions, and we are finished having children. There is a lot to consider with insurance. I feel lucky that we were given options and provided a ton of information.

Let me know if you have more questions!

 

[mb_uh]

Basics are this:

1. You must be enrolled in a healthcare plan that qualifies according to the IRS as a HIGH deductible plan- numbers vary based on individual or family

2. You make contributions or your employer does depending on the plan up to a threshold set by the government. These are tax free and lower your AGI- very good thing

3. You can spend on yourself and your dependents for the same medical items covered by a FSA (doctor visits, labwork, rx, durable medical equiment, some travel for medical care)

4.Great thing about this is that the money rolls over year to year unlike FSA it does not expire.

5. You can withdraw for other reasons if you pay tax on it.

6. I believe at retirement age your options are extended.

 

[Shelly F - Ohio]

If you have an HSA you can not have an FSA acct.

 

[fireflymedic]

I have one. and what I like is the money is taken out of your check pri-tax. and unlike a retirment acount that is pri-tax but have to pay income tax on it when you spend it with the health saving account you never pay tax on it. so i figure I'm getting a 20% + or what ever tax level your at every time I get glasses or take the kids to the dentest (i have no dental plan)

 

[Kirby]

Question - we were looking in to the HSAs recently and were told that we have to have an account for each individual person in our family instead of one account for the entire family. Is that true?

 

[musicluvr40]

We have one HSA plan that covers our entire family. My husband is listed as the primary, and the insurance company has myself and our two DD's on his plan.

 

[mkandjpsmom]

Another thing about HSA's is that you don't have to have a plan through your employer. If your employer doesn't offer health ins or you are self employed you can get a High Deductible Plan through an ins carrier for a lot less than an HMO. Then you can open your own HSA (most local banks will do it) and contribute to it. You can take a line item deduction on your 1040 for your contributions. Like a Traditional IRA deduction. Someone already mention about how the $$ in the HSA does not need to be used by the end of the year like a FSA well you can also use those funds (tax free) at any time for medical, Even if you went to reg ins (not a HD plan).
It's not a bad plan. Most people that itemize on their tax return don't get to deduct their out of pocket medical expenses because they don't go over the 7.5% threshold.

 

[Kirby]

We have one HSA plan that covers our entire family. My husband is listed as the primary, and the insurance company has myself and our two DD's on his plan.

Would you tell me what insurance company you have your HSA through?

I saw in a PP of yours that you were only paying $100 a month for insurance. I would love to only have to pay that. We're self insured and it's hard finding good insurance that's not out the kazoo. I realize that there's no way we would be able to only pay that little a month but we're looking at $1500 a month right now for regular insurance for a family of four.