I have been employed at my job for over three years. within the last 6 months, they promised to get me insurance. But, the insurance amount that they agreed to pay is not even worth having. Therefore, I began looking into Health Savings Accounts and that sort of thing. I don’t know much about them. Does anyone else have one, are they beneficial, and how do they work?
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- Is A Health Savings Account Considered Health Insurance?
- Ok, Should The Average Guy Go With A Health Savings Account Type Of Health Insurance?
- Would You Purchase Health Insurance Or Put The $ In A Savings Account?
- What Are The Rules Regarding Health Savings Accounts?
- I Want To Open A Health Savings Account?
health savings accounts are welfare for the rich.
A health savings account runs along side of a high deductible health plan. They are two separate things. You basically self insure up to the first $1500 or $2500 depending on your plan and when you hit that amount the insurance company will start sharing some of the costs with you.
Depending on the price and your total out of pocked exposure they can a good deal for anyone. Even the sick and old.
Sometimes you can save $5,000 in premiums and have a plan that has a maximum out of pocket of $3,000 or $4500. Guaranteed savings.
The plans and prices vary greatly though so you will have to look at the numbers for yourself.
A health savings account (HSA), is a tax-advantaged medical savings account available to taxpayers in the United States who are enrolled in a High Deductible Health Plan (HDHP). The funds contributed to the account are not subject to federal income tax at the time of deposit. Unlike a flexible spending account (FSA), funds roll over and accumulate year over year if not spent. HSAs are owned by the individual, which differentiates them from the company-owned Health Reimbursement Arrangement (HRA) that is an alternate tax-deductible source of funds paired with HDHPs. Funds may be used to pay for qualified medical expenses at any time without federal tax liability. Withdrawals for non-medical expenses are treated very similarly to those in an IRA in that they may provide tax advantages if taken after retirement age, and they incur penalties if taken earlier. These accounts are a component of consumer driven health care.
As a licensed agent, I wouldn’t recommend an HSA for an individual. For a family of 4, it’s a great option. I would consider going with an individual plan and see if your company would re-imburse you for the monthly premium. If you would like to speak to an educated agent, call me. My service is 100% free, so it can’t hurt to explore. My number is 877-442-5878 ext 13 or ask for Kevin.
They can be beneficial, if you’re relatively healthy. It’s a high deductible health insurance policy combined with a savings account, and the money in the account can ONLY be used for health expenses, BUT, rolls over from year to year. Earning interest.
Eventually, you WILL get old enough/sick enough to use the money – or you can spend it on a nursing home.
It is good because you only have to put so much in less then your own and then that is it but good luck getting one if your employer does not mind making you per diem or a contract employee and you don’t have a history of health problems in you family tree it is worth it.
Best of Luck
Health Savings Accounts are similar to IRAs or Individual Retirement Accounts used along side an HSA qualified Health Insurance Plan. You must have the insurance before you can open an HSA Account.
The insurance plans are all high deductible plans. Generally once you meet the deductible(and possibly coinsurance if you selected it), the insurance kicks in and starts to pay 100% of all of your expenses including prescriptions and office visits. Until that time you pay in full for those costs.
For example, a typical deductible for an individual plan might be $3000 which would enable you to set aside $3000 into your side HSA account as well. If you did that, between your insurance policy and your HSA account, you’d have the equivalent of 100% coverage. Not even the most expensive co-pay plan can offer that kind of protection. If you were to make that $3000 contribution into the HSA account and you were in a 30% tax bracket you’d save $900 in taxes because like with an IRA contribution, you can deduct the contribution from your adjusted gross income. So essentially, if you had to meet your deductible, you could access the money in the HSA account and your net cost for the deductible would really be just $2100.
You can make contributions yearly generally up to your chosen deductible amount. The best way to utilize the HSA account it to make the contribution and let the money grow and compound. When you reach retirement age you can take the money out and use it for regular living expenses only paying income tax on withdrawals. You can always access the account for medical dental or eyecare expenses but the HSA custodians try to nickle and dime you with transaction fees so it is better to make the contribution and just use other money to pay your medical expenses. If you need to, at the end of the year, look over your medical expenses and make one withdrawal out of your HSA account to reimburse yourself.
An ENORMOUS advantage of HSA plans are that they provide MUCH BETTER PROTECTION THAN CO-PAY PLANS because you never get stuck with having to pay unlimited co-pays. Example : Even if you have a plan with a $250 deductible and a $10 office visit co-pay and $10/$30/$50 for prescription drugs, you still would be responsible for paying the co-pays no matter what they added up to. What if you had to be on ten drugs each with a $50 co-pay?????That adds up to $500 per month or $6000 per year just to pay for your Rx co-pays! What kind of PROTECTION is that? ALWAYS REMEMBER, CO-PAY PLANS are not only over priced for what you get but theyHAVE TERRIBLE PROTECTION because there is no stop-loss on your out of pocket responsibility for co-pays. We probably wouldn’t even have a health care crisis right now if everyone with co-pay plans switched to HSA qualified plans. They’d immediately save betweenn 30 to 70% on the permiums AND they’d get real protection like I just described.
Another even less espensive medical insurance that can be a good alternative to a renewable major medical plan are short-term medical insurance plans. The best ones don’t limit the number of consecutive policies you can get. They usually only have a few medical questions and coverage starts in as little as 24 hours after you apply if you want. Like HSA qualified insurance they also don’t have co-pays so you know what your worst case out of pocket responsibility is.