HSA's- tell me the good and bad..

[havaneselover]

Okay, I'm confused. False? But True? You HAVE to have a HDHP to open an HSA. But HSA can live forever once that requirement is met. In my case the primary reason my CPA recommends an HSA is not to pay medical expenses now. We hope to retire in 3 years or so, which will be 3 years before we qualify for Medicare. We should have very little tax liability in those years if any......unlike now, so we are saving money today to spend then. When we get on Medicare, if things remain the way they are now, I plan to assign my benefit to an HMO like my mom did, and the coverage has zero deductible.

What was false is that you said "you can't legally have one without the other." Clearly this is complicated but some of your statements have been either unclear or untrue.

 

[tvguy]

What was false is that you said "you can't legally have one without the other." Clearly this is complicated but some of your statements have been either unclear or untrue.

Okay. I think you are splitting hairs. At some point you have to have one, to have the other.

 

[havaneselover]

Okay. I think you are splitting hairs. At some point you have to have one, to have the other.

Not splitting hairs--clarifying unclear/misleading statements.

 

[tvguy]

We have purchased our health insurance directly from the insurer for the past ten years. We have switched jobs, moved twice, and as long as we pay the monthly premium we have health insurance. It's pretty sweet. We will never obtain health insurance through an employer, as that no longer makes sense to us. We are also free to shop around for any HSA that we would like to open as we are covered by a HDHP. I think most folks think of these two items being tied together because they obtain both through their employer. For those of us out there on our own, we are free to choose any insurer and any HSA.

True. The second benefit for us with an employer provided HSA and HDHP is the employer puts $750 a year in. Free money.

 

[robinb]

We are moving to a HDHP and a HSA next year. My DH's employer made it way too attractive not to do it. I'm still a little scared about the change.

 

[tvguy]

Not splitting hairs--clarifying unclear/misleading statements.

Are you a lawyer? I feel like I am on jury duty where one lawyer objects to a question due to "lack of foundation", and then the other lawyer spends an hour laying foundation to ask a simple question.
So in that spirit, I will further clarify the entire reason we switched to a HDHP. Our plan covers the employee with no annual limit with the standard plan. But dependents are capped at $500,000 per year, per person. The only way in our plan to get no annual limit on insurance payouts for the dependents is to go with the HDHP. That change brings with it lower premiums, a higher deductible, and an option for an HSA.
And one of the reasons insurance companies prefer high deductibles is it discourages people from making medically unnecessary claims. A common cold most likely doesn't require a Doctor's visit, yet some people will go to the Doctor, Urgent Care or even the Emergency room.

 

[supersnoop]

Okay, I'm confused. False? But True? You HAVE to have a HDHP to open an HSA.

No, that's still not true. You can open an HSA without an HDHP. You just couldn't put any money in it. Government regulations require "splitting hairs."

 

[tvguy]

No, that's still not true. You can open an HSA without an HDHP. You just couldn't put any money in it. Government regulations require "splitting hairs."

Okay, Google is our friend. Here is it straight from the IRS. You cannot open an HSA without a HDMP.

Qualifying for an HSA

To be an eligible individual and qualify for an HSA, you must meet the following requirements.

• You must be covered under a high deductible health plan (HDHP), described later, on the first day of the month.
  
  
• You have no other health coverage except what is permitted under Other health coverage , later.
  
  
• You are not enrolled in Medicare.
  
  
• You cannot be claimed as a dependent on someone else's 2015 tax return.
  

https://www.irs.gov/publications/p969/ar02.html

 

[Hook326]

I have read over this whole thread and have a question. We have a PPO and an HSA we contribute to through my DH's work. Looking at this thread it seems like that's not suppose to be possible/legal? Or do some PPOs qualify as a HDHP? Thank you for any clarification!

 

[lanejudy]

I have read over this whole thread and have a question. We have a PPO and an HSA we contribute to through my DH's work. Looking at this thread it seems like that's not suppose to be possible/legal? Or do some PPOs qualify as a HDHP? Thank you for any clarification!

I suspect what you have a is "medical flexible spending account" -- it often mistakenly gets labeled HSA (meaning heathcare spending account). But it is a completely different animal. This is a "use it or lose it" type of account, where you put in X dollars for the 12-month period and must use those funds within the year for reimbursement of copays/deductibles with your PPO or non-covered expenses. I believe the family limit on an FSA is around $2600; the family limit on a true HSA is about $6500 and may be carried forward to future years.

HTH!

 

[wilkeliza]

I have read over this whole thread and have a question. We have a PPO and an HSA we contribute to through my DH's work. Looking at this thread it seems like that's not suppose to be possible/legal? Or do some PPOs qualify as a HDHP? Thank you for any clarification!

If it is a true HSA and not a Flex Spending Account then you either don't have a PPO or don't have a HSA. A PPO can have a high deductible but since it works on co-payments and flat fees for some services then you aren't suppose to have the benifits of an HSA.

 

[SandyinMonterey]

We had an HSA. However, we seem to be the minority in how it worked/what it does. We hated it. All medical expenses (except preventative such as basic mammogram and yearly physical) were out of pocket. If I had to bring my daughter to the pediatrician because she was sick, I had to pay the full amount. Was the same way for prescriptions. Had to pay until a very high deductible was met.

 

[Jennabeth]

If it is a true HSA and not a Flex Spending Account then you either don't have a PPO or don't have a HSA. A PPO can have a high deductible but since it works on co-payments and flat fees for some services then you aren't suppose to have the benifits of an HSA.

Not true, I have a HDHP that is a PPO and have an HSA. A PPO is a preferred provider health plan and can be a high deductible plan which qualify you for a health savings account. We've had it at work for over 5 years so it's nothing new. You need to talk to you HR or insurance person to know exactly what you have.

 

[Mickeyluver37]

OP, I think it's great that you are still giving your employees a choice. I work for a very large company, and we only have the HDHP plan as an option. It seems that all of these threads start with people weighing their options and trying to figure out which plan is best. So, a lot of this stuff seems more psychological in thinking that it's a good plan because you are saving money vs. the other alternative. I tend to try to compare what we are paying to what others are paying at other companies, and I'm honestly not a huge fan of the HDHP/HSA, but it seems to be the way more and more employers are headed. We still pay a significant amount in premiums, and what's even worse is all the paperwork with getting bills from so many different places. We do get $1250 of the $3,000 deductible placed in the account by the employer, but I would never refer to that as "free" money.

Also, I just checked our paperwork from HR, and it does say a high deductible PPO combined with an HSA. So I am 100% sure that its allowed.

 

[Hook326]

I suspect what you have a is "medical flexible spending account" -- it often mistakenly gets labeled HSA (meaning heathcare spending account). But it is a completely different animal. This is a "use it or lose it" type of account, where you put in X dollars for the 12-month period and must use those funds within the year for reimbursement of copays/deductibles with your PPO or non-covered expenses. I believe the family limit on an FSA is around $2600; the family limit on a true HSA is about $6500 and may be carried forward to future years.

HTH!

If it is a true HSA and not a Flex Spending Account then you either don't have a PPO or don't have a HSA. A PPO can have a high deductible but since it works on co-payments and flat fees for some services then you aren't suppose to have the benifits of an HSA.

Not true, I have a HDHP that is a PPO and have an HSA. A PPO is a preferred provider health plan and can be a high deductible plan which qualify you for a health savings account. We've had it at work for over 5 years so it's nothing new. You need to talk to you HR or insurance person to know exactly what you have.

I rechecked my insurance card & it says PPO & my health credit card says health savings account. We've had this for a few years & always get to carry our money to the next year. We don't have co-pays, we only get preventative paid for until deductible is met then it's 80/20. It's a big company so I'm sure they know what they're doing. It must just be more rare to have a PPO be a HDHP too I guess. Thanks for all of your responses!

 

[havaneselover]

Not true, I have a HDHP that is a PPO and have an HSA. A PPO is a preferred provider health plan and can be a high deductible plan which qualify you for a health savings account. We've had it at work for over 5 years so it's nothing new. You need to talk to you HR or insurance person to know exactly what you have.

Same here.

 

[wilkeliza]

Not true, I have a HDHP that is a PPO and have an HSA. A PPO is a preferred provider health plan and can be a high deductible plan which qualify you for a health savings account. We've had it at work for over 5 years so it's nothing new. You need to talk to you HR or insurance person to know exactly what you have.

I know what I have and also know that a PPO should not qualify for an HSA. If you have a PPO and pay co-pays you shouldn't be on an HSA. Even my tax advisor has said a insurance classified as a PPO no matter what the deductible is makes you ineligible to contribute to an HSA (you could still have one if you had a HDHP previously)

 

[wilkeliza]

I rechecked my insurance card & it says PPO & my health credit card says health savings account. We've had this for a few years & always get to carry our money to the next year. We don't have co-pays, we only get preventative paid for until deductible is met then it's 80/20. It's a big company so I'm sure they know what they're doing. It must just be more rare to have a PPO be a HDHP too I guess. Thanks for all of your responses!

Based on the fact you don't have co-pays they are probably calling it a PPO but it isn't a true PPO. By definition a PPO should have copays for in-network care. I'm sure there are a few insurances that are operating in the grey area but on base if you have a PPO that operates like a true PPO then it shouldn't be eligible. If you don't have co-pays and only have deductible and 80/20 then that operates like a HDHP so is only PPO in name. Very confusing to say the least.

 

[lanejudy]

I rechecked my insurance card & it says PPO & my health credit card says health savings account. We've had this for a few years & always get to carry our money to the next year. We don't have co-pays, we only get preventative paid for until deductible is met then it's 80/20. It's a big company so I'm sure they know what they're doing. It must just be more rare to have a PPO be a HDHP too I guess. Thanks for all of your responses!

While most commonly PPO is used to refer to a healthcare plan with copays, it actually only means "preferred provider organization." Traditional insurance means different things to different people -- many are most familiar (therefore "traditional") with HMOs, some with PPOs, and depending on age many of our parents or grandparents had "traditional" indemnity or fee-for-service insurance plans. There are many hybrids available, and again it all comes down to the structure rather than the name.

It sounds like in this case, PPO stands for the true meaning -- preferred provider organization. Your level of benefits is likely determined by in-network vs out-of-network, referrals are probably not needed for in-network and the in-network providers agree to a contracted reimbursement rate. Mine is very similar, and in fact my employer oddly calls it a "PPO with HSA" while the other option is called "PPO with copays." It sounds like your plan is structured correctly to be a HDHP and therefore use with an HSA is appropriate.

 

[Jennabeth]

Based on the fact you don't have co-pays they are probably calling it a PPO but it isn't a true PPO. By definition a PPO should have copays for in-network care. I'm sure there are a few insurances that are operating in the grey area but on base if you have a PPO that operates like a true PPO then it shouldn't be eligible. If you don't have co-pays and only have deductible and 80/20 then that operates like a HDHP so is only PPO in name. Very confusing to say the least.

The co-pay has nothing to do with whether or not it's a PPO. Our is a PPO because if you go to a preferred provider you get a discount on the services. It is a Preferred Provider Organization, our third party administrator has negotiated a discount with certain providers. We are free to go outside, but will pay more to do so. I keep bringing this up because there are so may misunderstanding about HSAs, FSAs, HDHPs, Co-Insurance, & Co-pays that it can be so confusing. Our company offers a Standard PPO Plan (with co-pays), a High Deductible Health Plan PPO (with an HSA) and Standard Priority Health HMO. Those are the exact titles of the plan and I've been around long enough to know they know what they are doing and wouldn't offer it if it weren't 'legal'.