I do, because of a post you made about it a few years back, so thank you. We had an HSA eligible plan for a couple of years and banked some cash in HSA accounts; unfortunately, my wife and I reverted back to a ‘real’ healthcare plan this year as we might be trying to get pregnant later this year and we (read: she) figured it was smart to get back on a non-HSA eligible plan.
We haven’t had any meaningful healthcare expenses these past couple of years, but the question will be once we do start racking up expenses whether we use the HSA to cover them or just let it continue to compound as a supplemental retirement fund. One problem is that most HSA account providers are terrible and charge fees and/or have really crappy investment options, which makes me lean towards using the funds to cover expenses.
I don’t:/ And my insurance is a complete c… I learned that when was looking for PT. I do have an FSA or something like that but you need to use it within a year, so it’s best for something pre planed
Correct. According to the Kaiser Family Foundation, Americans who receive health insurance through their employers paid an average family premium of $18,412 in 2016 and had additional out-of-pocket expenses of $1,478. So, an average American family that gets insurance through the parents’ employers pays just south of $20k per year on health insurance and medical care. About 22% of Americans are on Medicaid, however, and another 17% on Medicare. So, the 39% of Americans who are “poor” or elderly are basically on socialized medicine.
Some employers cover the monthly fees on the HSA and will make a percentage of the yearly contribution limit. Even if they don’t, the interest rate should be enough to offset the fees even if you choose not to invest the >$1k balance.
If you have a qualified high-deductible plan, you can set up a health savings account (HSA) and fund pre-tax up to the amount of your deductible each year. Money goes in pre-tax, gains are not taxed and no tax on withdraw as long as it’s used for a qualified health care expense.
So let’s assume you have a qualified plan with a $5,000 deductible. You can contribute $5,000 per year pre-tax every year. The administrator of the HSA (Optum is mine) will offer a simple savings account or directed investments. The account is completely portable. I assume if you try to spend the money on a non-health care expense, you get hit with monster fines.
Yeah I think the deductible has to be at least $1,250. You can contribute up to $3,400. (Individual #s, I believe it’s roughly double for family).
It is different than a 401(k) in that the contribution limit includes employee and employer, so for example in my case my employer puts in $2,000 so I can only put in another $1,400.
It differs from FSA in that it’s not use it or lose it. Rolls over each year and will earn a small interest rate, or anything above $1,000 can be put into investments similar to a 401(k)/IRA. I believe once you’re 65 you can start to withdraw for any purposes (but I believe that is taxed, not positive). This is why a lot of people refer to this as the third retirement account. But even if you’re only going to use it for medical expenses it’s obviously worth it due to the tax treatment.
^ The $5,000 annual limit on the childcare FSA is ridiculously low – it doesn’t even cover half a year of child care expenses for one of my kids. Still better than nothing though.
In order to qualify for an HSA, you must have a high-deductible health plan (HDHP). For 2017, your annual health insurance deductible must be at least $1,300 for single coverage (with an out-of-pocket maximum of $6,550) or $2,600 for family coverage (with an out-of-pocket maximum of $13,100).
In addition, you cannot be covered by another type of health insurance plan, be on Medicare, or be claimed as a dependent on someone’s tax return.
Can’t speak to anything other than what my company offers, but the name of the plan is literally “Qualified High Deductible Plan”. I do believe, however, that the govt. sets a minimum deductible amount that makes it qualified. I assume it also has to meet certain coverage criteria, but I’ve never really looked into it.
Wait. I thought your employer has to offer and HSA as part of the benefits? Or can one open an HSA account with an outside provider as long as the deductibles are over 1300 (for a single person)? My deductibles are 1600 but when I called the benefits dept, I was told only FSA is offered within the plan.