HELP!!!! Can someone explain to me how a Health Savings Account works???

[descovy]

I have three kids that do get sick and this sounds like it stinks for someone like me. So you have to meet your high deductible first? Our new employer is going to give me 200.00 a month. So this stinks if I'm reading this correctly. Can you have other health insurance that you pay for?

At the same time, it makes YOU the consumer care about how much health care costs. When you are on a $20 co-pay HMO you don't care how much the prescription is, the extra test, etc., etc.,... I believe it is why health care is so expensive as it is... people don't care how much it costs if someone else is paying for it.

We've been on an HSA for 3 years now. For us, it works. We have 3 kids, but overall are a healthy family. The job chips in $2500/yr and we chip in $2500/yr. We do this by taking what we used to pay in premiums in our old PPO plan and putting it toward the HSA. Fact of the matter is High deductable plans are that much cheaper than traditional plans. So we just take our *savings* and put it in the HSA.

Since we probably use less than average, we are KEEPING money in our pocket, rather than paying the extra in premiums. It will always be there, whenever we need it. Conversly, when we paid that much extra for a PPO it didn't go to us, it went to the insurance company. In our world, same net paycheck... more money in OUR account for OUR healthcare.

Well child visits are 100% covered. Conversly, I have found my pediatrician was charging $90/visit, while my family practice doctor (that dh and I were using) was only $60 a visit. We like our family practice guy, so we switched the kids over there. We price out how much Rx's cost... not just go to the closest Walgreens... or let the Dr prescribe the name-brand medicine emblazoned on his pen w/o first asking if a different medicine would work just as well. We found that especially true at our old pediatrician. She'd prescribe the Name Brand EVERYTHING (had swag all over the office from these companies) because most people didn't care. They'd just pay the $20 copay and expect insurance to pick up the rest.

Get used to these plans. When we got ours 3 years ago, it was an option at work. many people we know weren't using them. Now many more folks are finding it is their ONLY option. Companies can't keep up with traditional plans for much longer.

 

[bettymae1121]

At the same time, it makes YOU the consumer care about how much health care costs. When you are on a $20 co-pay HMO you don't care how much the prescription is, the extra test, etc., etc.,... I believe it is why health care is so expensive as it is... people don't care how much it costs if someone else is paying for it.

We've been on an HSA for 3 years now. For us, it works. We have 3 kids, but overall are a healthy family. The job chips in $2500/yr and we chip in $2500/yr. We do this by taking what we used to pay in premiums in our old PPO plan and putting it toward the HSA. Fact of the matter is High deductable plans are that much cheaper than traditional plans. So we just take our *savings* and put it in the HSA.

Since we probably use less than average, we are KEEPING money in our pocket, rather than paying the extra in premiums. It will always be there, whenever we need it. Conversly, when we paid that much extra for a PPO it didn't go to us, it went to the insurance company. In our world, same net paycheck... more money in OUR account for OUR healthcare.

Well child visits are 100% covered. Conversly, I have found my pediatrician was charging $90/visit, while my family practice doctor (that dh and I were using) was only $60 a visit. We like our family practice guy, so we switched the kids over there. We price out how much Rx's cost... not just go to the closest Walgreens... or let the Dr prescribe the name-brand medicine emblazoned on his pen w/o first asking if a different medicine would work just as well. We found that especially true at our old pediatrician. She'd prescribe the Name Brand EVERYTHING (had swag all over the office from these companies) because most people didn't care. They'd just pay the $20 copay and expect insurance to pick up the rest.

Get used to these plans. When we got ours 3 years ago, it was an option at work. many people we know weren't using them. Now many more folks are finding it is their ONLY option. Companies can't keep up with traditional plans for much longer.

Just curious, but with an HSA plan, are you locked in to certain doctors/hospitals like with a traditional HMO, or is it more like a PPO that you can pretty much go to whoever for whatever whenever, even specialists?

My company is still a traditional HMO but it wouldn't surprise me if they go the HSA route in another few years. I'd just like to know what I might be in for! I like the idea of HSA plans actually, they make a lot of sense.

 

[descovy]

Just curious, but with an HSA plan, are you locked in to certain doctors/hospitals like with a traditional HMO, or is it more like a PPO that you can pretty much go to whoever for whatever whenever, even specialists?

My company is still a traditional HMO but it wouldn't surprise me if they go the HSA route in another few years. I'd just like to know what I might be in for! I like the idea of HSA plans actually, they make a lot of sense.

Actually, that's the beauty of the HSA plan, we can choose to go wherever we want, as long as we are willing to pay for it. (even specialists) It is probably about as opposite to an HMO as can be.

You are in control.

And yes, like I said, get used to HSA's. For better or worse, they're coming. And if you are used to paying HMO premiums for the family, you would have no problem finding the extra money for the HSA. In my husband's employer, to cover a family, they had 3 options... HMO, PPO, HSA. HMO cost 2x more than HSA in premiums! Take that savings toward an HSA plan, and you essentialy don't pay anything more out of pocket.

Last year the company cut HMO entirely. Still have PPO but are strongly encouraging folks on the HSA route.

My neighbor's job is thinking of doing HSA plans only. She's in a tizzy. She's the kind that insists on a full blood workup when she has a cold. She wants to be tested for everything under the sun. She's all her adult life (in her 40's) been under an HMO. Her daughter was a premie needing weeks of NICU care, and all she paid was $5. The thought of having an HSA (and controlling costs) scares the bejeezus out of her. It is just so opposite of what she is used to.

 

[thelionqueen]

And, it reduces the amount of tax you owe because it is pre-tax, like the PP said.

I try to total my costs for a whole year and use that amount to put down each year. It covers my glasses, contacts, Rx charges, anything medical. They do give you a list so that you know what is and isn't allowed.

Plus, if say you get laid off in June and you've used up your amount..ha, ha! You don't have to repay it, the compnay covers the rest for you.


The downside is that you HAVE to spent that amount each year or you lose the money. I always spend all of mine so I don't have a problem.

The end comment of this post is completely incorrect. I am a benefits administrator who specializes in HDHP (High Deductible Health Plans) and HSA accounts. The amount contributed into your HSA account rolls over year after year. If you were never to use the balance, the funds would be similar to a 401k account and available after a specific age. The funds are yours once deposited and do not forefeit at the end of a calendar year (or any year).

The HSA account is set-up with deductions from you and/or you employer pre-tax (my employer contributes 75% of my annual deductible, I contribute the balance). It is basically like a debit checking account for medical expenses only. You can use this card just like a credit card at your doctor's office for prescriptions, etc.

Be careful though, there are also vendors that have absolutely nothing to do with the health care industry that can, in advertently, accept this card. I accidently used my card for gas which surprised me. If that happens, it is up to you to replace that money out of your checking account (not additional pre-tax contributions) before the end of the calendar year. If you do not, unauthorized charges will be subject to a penalty and payroll tax.

HDHP plans with an HSA account are generally excellent plans to have in place. You can also use an FSA (Flexible Spending Account or Cafeteria plan) if you employer offers one to help towards the high deductible.

Unlike the HSA, the FSA DOES NOT roll over year to year. Those contributions must be used in the plan year they were elected or be forefeited.

The HDHP plans and HSA accounts have many components and can be very confusing. In my experience, most people understand and appreciate them best after having used them for a full 12 month period of time.

We offer traditional PPO's, HMO and the HDHP and the HDHP is BY FAR the best plan we offer and the one 90% of employee's sign up for, I highly recommend them (I have it too)

 

[shruley]

There is a HUGE difference in how HSAs are run, from company to company and state to state, so I would suggest that you ask someone in HR to sit down with you to explain the details as you may get very different advice on this board than what you are actually being offered. But the general idea is you and your employer contribute to an account that is used to pay for your medical needs, and you usually have a high deductible plan. To know how good of a coverage it is depends on how high the deductible you must pay before it pays 100%, the amount your employer is contributing and how the $$$ carries over and what it can be used for. For me, we save money by switching to a form of a HSA, but our employer contributes a large amount each year. Actually, for our employees on a singles plan they make money because the employer puts in enough $$$ into the account to cover their out of pocket maximum. So if they have catastrophic illness, they are covered without any money out of pocket (except premiums) and if they don't use their full $1850 contributed, it just stays in the account and they can use it for several "health related things"....dental, glasses, and when they retire it can be used to pay for their health care premiums.

But I would ask someone in your company to review it with you!

 

[NemoMOm]

I have three kids that do get sick and this sounds like it stinks for someone like me. So you have to meet your high deductible first? Our new employer is going to give me 200.00 a month. So this stinks if I'm reading this correctly. Can you have other health insurance that you pay for?

This is how ours work. we have 2 kids and another on the way. DH's co. offers 4 plans. The cheapest was $175 per mos and had 2500 deductible and only covered maternity delivery of 80% after deductible. So we started a HSA and we put $200 per mos, which we do not even miss

They gave us a HSA mastercard and every time we have a medical bill or sick bill, we use it. We love it and wii do it next year

 

[Andrea73]

In some cases, your "plan" will cover Preventive care without the deductible, but other things like sick visits, ER, hospital stays require the ded to be met first. Many employers will help fund your HSA account. DH's contributes $500 for singles and $1000 per family. This fund can be used to pay for medical expenses. There is also an out of pocket maximum so you don't have to worry about going bankrupt if there is a health issue.

I am wishing I had chose the HSA over the Piece of S Kaiser plan we got pushed into this year.

 

[MTW]

Glad you are figuring things out! Hope I could be of some assistance. It's tough because it's so confusing and someone who thinks they could be helping you out may not fully understand the question. I always cringe when I read the answers to some tax questions posted here

My neighbor's job is thinking of doing HSA plans only. She's in a tizzy. She's the kind that insists on a full blood workup when she has a cold. She wants to be tested for everything under the sun. She's all her adult life (in her 40's) been under an HMO. Her daughter was a premie needing weeks of NICU care, and all she paid was $5. The thought of having an HSA (and controlling costs) scares the bejeezus out of her. It is just so opposite of what she is used to.

One last soapbox. This is what's wrong with healthcare. People have gotten used to getting whatever, whenever. I am a proponent of the HSAs for reasons listed above. It makes you consider what is important and what may be routine...ie. a cold. Car insurance does not cover routine maintenance or repairs to your vehicle....health ins should be the same way. If people paid more attention to healthcare prices and shopped around, perhaps the costs would come back into line with what they should be.

 

[SuzanneSLO]

The standards for HSAs are set by the Federal government so they are generally the same for everyone. One big difference is that some financial institutions charge fees for having an HSA, and others pay reasonable interest (at least by today's standards). So if you can shop around for where to keep your acccount, you may end up with more money in it.

There is actually a lot of detailed info at the Treas. Dept website at http://www.treas.gov/offices/public-affairs/hsa/faq.shtml

The Health Insurance Plans, on the other hand, can vary tremendously.

We had a HSA for the first time last year and thanks to an emergency room visit, hit our deductible. Even so, we were able to pay for everything out of pocket and have the contribution from last years still in the account earning 2% interest. It's nice to know we have this as an additional emergency fund, which can now be spent on anything since we already documented the medical expenses last year.

The one downside to an HSA: stacks of paperwork to document every medical expense, boh covered by insurance and not. -- Suzanne

 

[Handbag Lady]

The bank I worked for was bought out by another a few years back. I called HR to figure out how this would work for my HSA. I was not-so-subtly told that I would not have to repay it. So I did the max ($5000), had $416 taken out of my paychecks before the merger went through, and got LASIK.

Awesome!


I was laid off in a November of a year where I already spent the FSA in June. I didn't have to pay the November and December portions. You did a LOT better than I did!

 

[Handbag Lady]

The end comment of this post is completely incorrect. I am a benefits administrator who specializes in HDHP (High Deductible Health Plans) and HSA accounts. The amount contributed into your HSA account rolls over year after year. If you were never to use the balance, the funds would be similar to a 401k account and available after a specific age. The funds are yours once deposited and do not forefeit at the end of a calendar year (or any year).

The HSA account is set-up with deductions from you and/or you employer pre-tax (my employer contributes 75% of my annual deductible, I contribute the balance). It is basically like a debit checking account for medical expenses only. You can use this card just like a credit card at your doctor's office for prescriptions, etc.

Be careful though, there are also vendors that have absolutely nothing to do with the health care industry that can, in advertently, accept this card. I accidently used my card for gas which surprised me. If that happens, it is up to you to replace that money out of your checking account (not additional pre-tax contributions) before the end of the calendar year. If you do not, unauthorized charges will be subject to a penalty and payroll tax.

HDHP plans with an HSA account are generally excellent plans to have in place. You can also use an FSA (Flexible Spending Account or Cafeteria plan) if you employer offers one to help towards the high deductible.

Unlike the HSA, the FSA DOES NOT roll over year to year. Those contributions must be used in the plan year they were elected or be forefeited.

The HDHP plans and HSA accounts have many components and can be very confusing. In my experience, most people understand and appreciate them best after having used them for a full 12 month period of time.

We offer traditional PPO's, HMO and the HDHP and the HDHP is BY FAR the best plan we offer and the one 90% of employee's sign up for, I highly recommend them (I have it too)

I BEG your pardon. Clearly, as were others, I was thinking this is a FSA. We don't have HSA here and they sounded like they are the same.

 

[quentina]

I think OP is talking about a Healthcare Spending Account (HSA) as opposed to what the replies have been about: a Flexible Spending Account (FSA). I tried to understand how HSAs work (I'm familiar with FSAs) when my husband changed jobs, but I never found a really good explanation.

Think of the HSA as a high deductible medical plan. It is best used for people who are not sickly.

You contribute per pay period if you choose and in addition your company gives a deposit towards your out of pocket. With the HSA, if you do not use the money deposited, it is yousr forever. I tell people to think of it as a retirement medical account. THe money in the bank account CAN be audited. It is important to only use it for medical. In addition, if you kids or spouse have coverage from another PPO, look into your state laws if you can even have the HSA.

Most HSA's do not have a lifetime cap when most PPO's do. The thing that is usually the deal breaker for my assocaites is the office visit cost. If you have a PPO and your visit is $20.00, that is what you pay. With the HSA, if the visit is $120.00, that is what you pay. You SHOULD have the funds on your debit card to cover however; if you start in January and have a major illness in January, you will not have the funds. In my company, the family deductible is $6000.00. This takes a while to build up.

I will say that 40% take the HSA, 60% PPO. The people who have the HSA tend to really like it. Personally, I have 3 kids....I am not willing to chance the large deductible in January.....I prefer to spend the $20 bucks for a visit and take my chances the rest of the year.

The FSA, is your money that you deposit to pay for medical expenses. This has nothing to do with actual insurance coverage. If you put $500 year in your FSA, you have $500 to spend on prescription's, co-pays, contacts etc. If you don't use it, your lose it.

 

[shruley]

I disagree that a HSA is not a good idea if you are "sickly". My DD is very "sickly", had 2 heart surgeries just last year alone, and we make out better under our HSA than we did with our traditional plan. Mostly because drugs costs are included in that deductible where we payed a seperate, larger deductible for those under the traditional plan. Because of the amount our employer contributes, if someone meets their OOP maximum, they are at about the same cost out of pocket and for premiums for HSA as if they'd gone with a traditional plan. But if you don't have a lot of costs that year, you are money ahead. While the laws governing HSAs may be the same, I think it's impossible to say if they are a good deal or not without knowing the specifics of a plan.

 

[PinballFamily]

I disagree that a HSA is not a good idea if you are "sickly".

Thanks. This seems like a good point - we've heard SO much that they are great for "healthy people"... We are, but only up to a point! DH has heart issues and DS has autism. But, it seems we will pay about the same for the HSA as we did for the HMO plan (or perhaps even a tiny bit less). We will have no trouble hitting the max out of pocket levels per year and what we save in the monthly premiums (and plus the employer contribution) will cover the cost of the high deductible.