Has anyone reached their HSA deductible?

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wholeinone04
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Has anyone reached their HSA deductible?

Post by wholeinone04 »

I have a $3,500 deductible on my HSA account through my employer. But the only purchases I have made this year have been for OTC drugs, optometrist, dentist, etc.

My HDHP is through Aetna and I am wondering how they will know if I hit my deductible. If I were to get sick, I was planning on going to a cheap medical clinic or something like that. Do I have to go to Aetna doctors for the money to be counted as part of my $3,500 deductible. Wouldn't that defeat the whole purpose of an HSA and being able to choose whichever doctor I want?

What do you guys with an HSA do when you need to see a doctor?

Thanks!
Splash
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Post by Splash »

Aetna (or any other health insurance) will notify you when your billed expenses have hit the deductible.

If you pay cash and do not allow the provider to bill, then Aetna will not have a record of that. If you go to an out-of-network provider, Aetna would likely remind you that it is your responsibility to pay for the charge and not apply anything to your deductible.

HSA's have nothing to do with your choice of providers. That is between you and your health insurance.

I think that OTC meds are not an allowable reimbursement under HSA rules.
jeh676
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Post by jeh676 »

We have hit our deductible ($3K), but we are a family of 6 and 2 have health issues.

Our HDHP has out of network benefits, but the out of network coinsurance rates are higher, so we stay in network if at all possible. We could go out of network, but then they aren't limited in what they charge, whereas is we go to somebody in Anthem's network, they reduce the charges to the contracted rates.

We have both an HSA and a limited use FSA. If we hit our deductible, we can notify our FSA recordkeeper (they have a form) that we have hit the deductible. After that point, we can use the FSA for medical expenses. Before we fill out that form, we can only use the HSA to reimburse medical expenses.

I'm not sure what OTC meds would have to do with your deductible, though they are still covered under FSAs and HSAs, though after 1/1/2011 that becomes more complicated.
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bearwolf
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Re: Has anyone reached their HSA deductible?

Post by bearwolf »

wholeinone04 wrote:I have a $3,500 deductible on my HSA account through my employer. But the only purchases I have made this year have been for OTC drugs, optometrist, dentist, etc.

My HDHP is through Aetna and I am wondering how they will know if I hit my deductible. If I were to get sick, I was planning on going to a cheap medical clinic or something like that. Do I have to go to Aetna doctors for the money to be counted as part of my $3,500 deductible. Wouldn't that defeat the whole purpose of an HSA and being able to choose whichever doctor I want?

What do you guys with an HSA do when you need to see a doctor?

Thanks!
Your HSA doesn't have a deductible, your HDHP does. Yes we hit our deductible usually in January. My wife has been having serious medical problems for the last 2-3 years. Our deductible has been raised by about 100% so it will probably take us till February to hit the deductible next year. Aetna is a great company, that is who we are with. They will keep track of your in network and out of network deductibles for you. Just make sure you present your card when you go for treatment. It is likely less expensive to get the Aetna negotiated rate rather than the cash rate. We have had many bills in the multiple thousand dollar range be billed at under $1000 with the Aetna rate. I doubt you will get such a good rate negotiating it on your own.

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wholeinone04
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Post by wholeinone04 »

bearwolf - This is kind of what I'm getting at. So the deductible is with the HDHP, so if my deductible is $3,500, I have to spend $3,500 on medical expenses such as broken legs, car accidents, etc. that would require me to go to a doctor. OTC drugs, chiropractors, etc. all come out of my HSA, but my HDHP has no knowledge of these transactions.

So if I get sick, I need to find an aetna in-network doctor and go to them instead of just going to a cheap cash only medical clinic?

Thanks for the replies everyone!
cliffedelgado
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Post by cliffedelgado »

wholeinone04 wrote:bearwolf - This is kind of what I'm getting at. So the deductible is with the HDHP, so if my deductible is $3,500, I have to spend $3,500 on medical expenses such as broken legs, car accidents, etc. that would require me to go to a doctor. OTC drugs, chiropractors, etc. all come out of my HSA, but my HDHP has no knowledge of these transactions.

So if I get sick, I need to find an aetna in-network doctor and go to them instead of just going to a cheap cash only medical clinic?

Thanks for the replies everyone!
What do you mean "need to find an aetna in-network doctor" ? If you are purposely trying to meet your deductible so that all care after that will be 100% covered, then yes. If not, then I think the cheap cash only medical clinic may even be cheaper, and could probably be paid through the HSA as well.

When I need to see a doctor, I pay the cost out of pocket and keep the receipt. Last I checked, there is still no rule that you must get reimbursed from your own HSA in the same year. This way, the money can continue to grow tax free.
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MossySF
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Post by MossySF »

wholeinone04 wrote:So if I get sick, I need to find an aetna in-network doctor and go to them instead of just going to a cheap cash only medical clinic?
Yes ... deductibles generally only apply to in-network at least a full rate.

Our insurance broker did forward us a plan from Healthnet where both in-network and out-network was treated equally -- $3500/$7000 deductible/OOP no matter who you saw. If you are lucky enough to have such a plan, you can go to a cash-only medical clinic but you'd have to somehow get the bills forwarded to the insurance company. It would then be up to them to decide whether the bill was legit and could be counted against your deductible or reimbursed if over the deductible (good luck?). I suspect the general idea is still the provider whether in-network or out will still forward the bill first to the HDHP and then bill you for the proper amount afterwards.
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bearwolf
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Post by bearwolf »

wholeinone04 wrote:bearwolf - This is kind of what I'm getting at. So the deductible is with the HDHP, so if my deductible is $3,500, I have to spend $3,500 on medical expenses such as broken legs, car accidents, etc. that would require me to go to a doctor. OTC drugs, chiropractors, etc. all come out of my HSA, but my HDHP has no knowledge of these transactions.

So if I get sick, I need to find an aetna in-network doctor and go to them instead of just going to a cheap cash only medical clinic?

Thanks for the replies everyone!
Yes. You are on the right track. Say you get a serious condition that calls for a CT scan. You go to the hospital have the scan and show them your card. They send Aetna a bill for $10,000. Aetna says "we only pay $2000 for that service". That is their negotiated rate with that provider. You have met $2000 toward your deductible and the hospital writes off $8000. If you haven't fully met your deductible you pay the $2000 to the hospital, or as much of the $2000 that lets you fulfill your deductible for the year. If you go in and say to the hospital I'm a cash customer how much for a CT scan. They might say "full price is $10,000 but since you are paying cash we'll give you a 25% discount. You pay $7500 and none of it gets counted toward your deductible. If you have $7500 in your HSA you can pay for it with that or out of pocket. You only have to show the receipts if you are subject to an IRS audit.

Hope that helps.

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tarnation
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Post by tarnation »

Splash wrote:I think that OTC meds are not an allowable reimbursement under HSA rules.
You can still get reimbursed for any OTC meds, just make sure they were purchased before 1/1/2011.
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joebruin77
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Post by joebruin77 »

I believe a key point is to make sure the doctor you see has indeed filed a claim with Aetna. Last year, I saw a doctor and, even though I gave them my new Aetna insurance policy info, they sent the claim to my old Blue Shield insurance policy. I do keep careful track of these claims so I caught the error.

So make sure any healthcare provider you see, including pharmacies, physical therapists, psychologists, etc. do follow through and submit a claim for each service. Aetna will have no way of knowing about the service (and thus won't apply it to your deductible) unless a claim is submitted by the service provider.
jeh676
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Post by jeh676 »

I generally don't pay until they've already submitted the claim, because I need the EOB to see what the contracted rate is.

OTC drugs, chiropractors, etc. all come out of my HSA, but my HDHP has no knowledge of these transactions.


Your OTC drugs don't matter for deductible purposes. Chiropractic coverage likely depends on your plan.

My son was previously seeing an out of network provider (very specific condition) and we do have out of network benefits. We were basically saving receipts while paying OOP, and then submitted IF we hit the out of network deductible on a gross basis.
wander
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Post by wander »

cliffedelgado wrote: What do you mean "need to find an aetna in-network doctor" ? If you are purposely trying to meet your deductible so that all care after that will be 100% covered, then yes. If not, then I think the cheap cash only medical clinic may even be cheaper, and could probably be paid through the HSA as well.

When I need to see a doctor, I pay the cost out of pocket and keep the receipt. Last I checked, there is still no rule that you must get reimbursed from your own HSA in the same year. This way, the money can continue to grow tax free.
I was charged twice by doctor's office (at the office and they billed my insurance HDHP). First, they told me to pay cash at the office because they were not sure if my insurance was going to pay them; then they billed my insurance and got paid again.
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Zapped
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Post by Zapped »

I thought bearwolf's 2nd post explained the relation between what the provider wants to charge, what the insurance company will actually pay, and what the patient may be responsible for in the end very well. That's exactly my experience with the system.

I've been really lucky to have had a great PPO with very low annual deductibles and very low premiums for many years. This year we're keeping that PPO with the same low deductibles and low premimums but also adding an HSA+HDHP option where the company kicks in a really sweet nut into the HSA. I'm reading this thread because many of us are considering the HSA+HDHP option and trying to suss out any gotchas before committing during this open enrollment period.

bearwolf's post mentioned: If you go in and say to the hospital I'm a cash customer how much for a CT scan. They might say "full price is $10,000 but since you are paying cash we'll give you a 25% discount". You pay $7500 and none of it gets counted toward your deductible.

I've heard that in Texas it's actually illegal for doctors to offer a lower price to cash customers. What does happen in practice is that a doctor may say (only verbally) "I'll bill you $400 but if you only pay me $200 in cash I won't pursue you for the remainder", but you are relying on the doctor or his finance/billing person to remember the agreements. And if they systematize it, e.g. they're always extending a 50% cash discount on-the-sly, they worry that they're actually committing a crime in my state.

If anyone knows that to be true or untrue in Texas, please chime in.
- Jim in Austin, TX
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Zapped
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Post by Zapped »

I thought bearwolf's 2nd post explained the relation between what the provider wants to charge, what the insurance company will actually pay, and what the patient may be responsible for in the end very well. That's exactly my experience with the system.

I've been really lucky to have had a great PPO with very low annual deductibles and very low premiums for many years. This year we're keeping that PPO with the same low deductibles and low premimums but also adding an HSA+HDHP option where the company kicks in a really sweet nut into the HSA. I'm reading this thread because many of us are considering the HSA+HDHP option and trying to suss out any gotchas before committing during this open enrollment period.

bearwolf's post mentioned: If you go in and say to the hospital I'm a cash customer how much for a CT scan. They might say "full price is $10,000 but since you are paying cash we'll give you a 25% discount". You pay $7500 and none of it gets counted toward your deductible.

I've heard that in Texas it's actually illegal for doctors to offer a lower price to cash customers. What does happen in practice is that a doctor may say (only verbally) "I'll bill you $400 but if you only pay me $200 in cash I won't pursue you for the remainder", but you are relying on the doctor or his finance/billing person to remember the agreements. And if they systematize it, e.g. they're always extending a 50% cash discount on-the-sly, they worry that they're actually committing a crime in my state.

If anyone knows that to be true or untrue in Texas, please chime in.
- Jim in Austin, TX
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Post by cubedbee »

wander wrote:
cliffedelgado wrote: What do you mean "need to find an aetna in-network doctor" ? If you are purposely trying to meet your deductible so that all care after that will be 100% covered, then yes. If not, then I think the cheap cash only medical clinic may even be cheaper, and could probably be paid through the HSA as well.

When I need to see a doctor, I pay the cost out of pocket and keep the receipt. Last I checked, there is still no rule that you must get reimbursed from your own HSA in the same year. This way, the money can continue to grow tax free.
I was charged twice by doctor's office (at the office and they billed my insurance HDHP). First, they told me to pay cash at the office because they were not sure if my insurance was going to pay them; then they billed my insurance and got paid again.
Then your doctor owes you money. Your insurance company should have sent you an Explanation of Benefits that shows exactly how much they paid to the doctor, and more importantly how much you owe the doctor. If you paid him any more than this, he owes you a refund.
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Post by FrugalInvestor »

Yes, I hit my $2500 deductible this year (the first time I've ever needed anything more than preventative care) when I needed a very common surgery. I took the opportunity to address a couple of other nuisance problems this year since the insurance company was picking up 80%. Everything was run through the insurance company if for no other reason than to get their negotiated rates. I was billed $25,000 for my surgery (hospital charges only, no surgeon, anesthesiologist, etc.) but the negotiated rate was $3,750.
Have a plan, stay the course and simplify. Then ignore the noise!
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Re: Has anyone reached their HSA deductible?

Post by grabiner »

wholeinone04 wrote:I have a $3,500 deductible on my HSA account through my employer. But the only purchases I have made this year have been for OTC drugs, optometrist, dentist, etc.

My HDHP is through Aetna and I am wondering how they will know if I hit my deductible. If I were to get sick, I was planning on going to a cheap medical clinic or something like that. Do I have to go to Aetna doctors for the money to be counted as part of my $3,500 deductible. Wouldn't that defeat the whole purpose of an HSA and being able to choose whichever doctor I want?
With most plans, the plan has an allowance which is the amount it will cover. Thus, if you see a non-PPO doctor who charges $200 and the plan allowance is $150, the $150 is a covered expense. If you haven't met your deductible, $150 is applied towards the deductible; if you have met it, you get benefits based on the $150 (for example, you get $120 if there is a 20% co-payment). In either case, the remaining $50 is not counted for insurance purposes, although you can pay that $50 from an HSA.
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Electron
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Post by Electron »

Here is another question on HSA Accounts. Assume that one pays for a qualified expense out of pocket, and the deductible has not been met.

Can one withdraw that amount from their HSA only for that tax year, or can the expense be carried to a future year and withdrawn? I understand that expenses withdrawn from an HSA will be listed on IRS Form 8889 which is submitted with their tax return.

It appears that qualified expenses are defined the same as medical expenses that can be deducted on Schedule A. Pub 502 indicates that expenses must be paid in the same tax year if deducted on Schedule A.
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Post by FrugalInvestor »

KAWill70 wrote:Here is another question on HSA Accounts. Assume that one pays for a qualified expense out of pocket, and the deductible has not been met.

Can one withdraw that amount from their HSA only for that tax year, or can the expense be carried to a future year and withdrawn? I understand that expenses withdrawn from an HSA will be listed on IRS Form 8889 which is submitted with their tax return.

It appears that qualified expenses are defined the same as medical expenses that can be deducted on Schedule A. Pub 502 indicates that expenses must be paid in the same tax year if deducted on Schedule A.
It is my understanding that you may "save up" your qualified expenses that are not deducted on your tax return and reimburse yourself for them in a later year from your HSA with no tax consequence.
Have a plan, stay the course and simplify. Then ignore the noise!
MoneyOCD
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Post by MoneyOCD »

bearwolf wrote:.....If you go in and say to the hospital I'm a cash customer how much for a CT scan. They might say "full price is $10,000 but since you are paying cash we'll give you a 25% discount. You pay $7500 and none of it gets counted toward your deductible. If you have $7500 in your HSA you can pay for it with that or out of pocket. You only have to show the receipts if you are subject to an IRS audit.

BearWolf
Just to clarify above: if you paid cash and provider do not file claim for you to insurance you need to ask for itemizes receipt. Then send that receipt to insurance on your own and you will receive back Explanation of benefits. Money will be applied to deductible but only 2k in above example. If you paid cash but that visit put you above deductible where insurance has to start to pay - they will send you check, just make sure to attach payment receipt to your submission or itemized statement need to show your payment amount.
cliffedelgado
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Post by cliffedelgado »

FrugalInvestor wrote:
KAWill70 wrote:Here is another question on HSA Accounts. Assume that one pays for a qualified expense out of pocket, and the deductible has not been met.

Can one withdraw that amount from their HSA only for that tax year, or can the expense be carried to a future year and withdrawn? I understand that expenses withdrawn from an HSA will be listed on IRS Form 8889 which is submitted with their tax return.

It appears that qualified expenses are defined the same as medical expenses that can be deducted on Schedule A. Pub 502 indicates that expenses must be paid in the same tax year if deducted on Schedule A.
It is my understanding that you may "save up" your qualified expenses that are not deducted on your tax return and reimburse yourself for them in a later year from your HSA with no tax consequence.
That is my understanding as well. It does not have to be withdrawn in the same year. Be sure to keep your receipts safe.
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Post by Electron »

FrugalInvestor wrote:It is my understanding that you may "save up" your qualified expenses that are not deducted on your tax return and reimburse yourself for them in a later year from your HSA with no tax consequence.
Thanks FrugalInvestor and Cliffedelgado, and I'm glad to hear that one can withdraw from an HSA to pay for expenses from previous years.

It looks as though Qualified Expenses are defined the same for an HSA and Itemized Deductions, but Schedule A is a little different in terms of date requirements.
wander
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Re: Has anyone reached their HSA deductible?

Post by wander »

bearwolf wrote:
wholeinone04 wrote:I have a $3,500 deductible on my HSA account through my employer. But the only purchases I have made this year have been for OTC drugs, optometrist, dentist, etc.

My HDHP is through Aetna and I am wondering how they will know if I hit my deductible. If I were to get sick, I was planning on going to a cheap medical clinic or something like that. Do I have to go to Aetna doctors for the money to be counted as part of my $3,500 deductible. Wouldn't that defeat the whole purpose of an HSA and being able to choose whichever doctor I want?

What do you guys with an HSA do when you need to see a doctor?

Thanks!
Your HSA doesn't have a deductible, your HDHP does. Yes we hit our deductible usually in January. My wife has been having serious medical problems for the last 2-3 years. Our deductible has been raised by about 100% so it will probably take us till February to hit the deductible next year. Aetna is a great company, that is who we are with. They will keep track of your in network and out of network deductibles for you. Just make sure you present your card when you go for treatment. It is likely less expensive to get the Aetna negotiated rate rather than the cash rate. We have had many bills in the multiple thousand dollar range be billed at under $1000 with the Aetna rate. I doubt you will get such a good rate negotiating it on your own.

BearWolf
I notice that VSEAX (At Aetna Chase HSA) had a distribution of $1.049 on December 14; however, I have not seen any gaining in the number of shares and transaction history for this month only shows the amount that I deposited. Should I be worried?
cliffedelgado
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Post by cliffedelgado »

KAWill70 wrote:
FrugalInvestor wrote:It is my understanding that you may "save up" your qualified expenses that are not deducted on your tax return and reimburse yourself for them in a later year from your HSA with no tax consequence.
Thanks FrugalInvestor and Cliffedelgado, and I'm glad to hear that one can withdraw from an HSA to pay for expenses from previous years.

It looks as though Qualified Expenses are defined the same for an HSA and Itemized Deductions, but Schedule A is a little different in terms of date requirements.
I think the HSA must have been open prior to the date of the medical services being rendered in order for those medical expenses to be eligible. Just a reminder. So you can't use your HSA funds now for medical expenses from 5 years ago when you didn't even have an HSA and/or HDHP. Just wanted to make that clear.
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