Another Basic Health Savings Account Question

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Post Reply
outdoorsygal
Posts: 91
Joined: Fri Aug 05, 2016 5:29 pm

Another Basic Health Savings Account Question

Post by outdoorsygal » Mon Aug 15, 2016 8:07 pm

Ok so my employer had asked for the routing number and bank account number of the Health Savings Acct I opened at First Tech.

Now she left a message saying the company is not going to be contributing the $20 (which it reads for age 47, they contribute $338 towards said Health Plan and my health plan cost is actually $208. So I assumed that is where she got the $20 from. And that Kaiser will have an account for me to login to and I would transfer that $208 HDHP premium to my bank account?

Our HR person is very confused about HSA's. I cannot ask her anything really and am afraid they won't offer them next year if I am too much trouble.

First Tech Credit Union opened the account except the Representative has never opened up an HSA before and knew less than I did about them, so I didn't bother to get my questions answered. He just started working there and came from BofA as a teller.

With my online research, the above is how I understand it. I am healthy, age 47 so will be paying for any medical bills myself and saving the receipts for later when I cash it out possibly at or after age 65 (when the 20% penalty no longer applies). Thanks again for all of the support from all the wonderful posters.
Last edited by outdoorsygal on Tue Mar 07, 2017 10:35 pm, edited 1 time in total.

outdoorsygal
Posts: 91
Joined: Fri Aug 05, 2016 5:29 pm

Re: Another Basic Health Savings Account Question

Post by outdoorsygal » Mon Aug 15, 2016 8:15 pm

My employer has no HSA bank set up. She said to set up my own so that is why I chose First Tech Credit Union because they pay 1% APY and CD rates are very high too,

Spirit Rider
Posts: 6592
Joined: Fri Mar 02, 2007 2:39 pm

Re: Another Basic Health Savings Account Question

Post by Spirit Rider » Mon Aug 15, 2016 9:27 pm

outdoorsygal wrote:Now she left a message saying the company is not going to be contributing the $20 (which it reads for age 47, they contribute $338 towards said Health Plan and my health plan cost is actually $208. So I assumed that is where she got the $20 from. And that Kaiser will have an account for me to login to and I would transfer that $208 HDHP premium to my bank account?

Can you explain this better, I have no idea what you are trying to say.

I am healthy, age 47 so will be paying for any medical bills myself and saving the receipts for later when I cash it out possibly at or after age 65 (when the 20% penalty no longer applies).

Here again, I am not sure I understand what you are saying.

Yes, you can defer taking qualified withdrawals until such time as you want. This can be before or after age 65 because the 20% penalty does not apply to qualified withdrawals. Even after age 65 it would probably not make sense to take non-qualified withdrawals. This is because you are likely to have substantial qualified expenses after 65. There are Medicare Part B premiums, deductibles, co-pays, vision expenses, dental expenses, etc...

outdoorsygal
Posts: 91
Joined: Fri Aug 05, 2016 5:29 pm

Re: Another Basic Health Savings Account Question

Post by outdoorsygal » Mon Aug 15, 2016 10:02 pm

Hi Spiritrider

I think part of my post didn't apply. Basically if my employer isn't going to contribute any money, then I would eventually get the money in my hands via Kaiser Permanente? I signed up with them via a HDHP. So I can transfer the Kaiser Premium money my emplpyer pays for my HDHP from Kaiser's Custidian to my own bank account?

The $20 doesn't really matter. I probably just confused the issue by mentioning it.

Thanks so much, you are such a help to me

mhalley
Posts: 5179
Joined: Tue Nov 20, 2007 6:02 am

Re: Another Basic Health Savings Account Question

Post by mhalley » Mon Aug 15, 2016 11:08 pm

If you are planning on paying your health bills now and letting the hsa grow until after age 65, you are going to want an hsa that pays >1%. Does this hsa provider have a brokerage option?
Use this to find an hsa provider with low fees and a brokerage option.
https://www.hsasearch.com/

User avatar
tfb
Posts: 7736
Joined: Mon Feb 19, 2007 5:46 pm
Contact:

Re: Another Basic Health Savings Account Question

Post by tfb » Tue Aug 16, 2016 12:06 am

outdoorsygal wrote:Basically if my employer isn't going to contribute any money, then I would eventually get the money in my hands via Kaiser Permanente? I signed up with them via a HDHP. So I can transfer the Kaiser Premium money my emplpyer pays for my HDHP from Kaiser's Custidian to my own bank account?

Not sure what the premium money has anything to do with HSA. The premium is paid to Kaiser for the insurance. Kaiser will keep it. HR might be saying Kaiser has an affiliated HSA provider you can use, for you to contribute into on your own. Now that you opened your own account elsewhere, it's your choice whether you use Kaiser's affiliated HSA provider or First Tech or any other provider.
Harry Sit, taking a break from the forums.

outdoorsygal
Posts: 91
Joined: Fri Aug 05, 2016 5:29 pm

Re: Another Basic Health Savings Account Question

Post by outdoorsygal » Tue Aug 16, 2016 1:10 pm

tfb, thank you.

So Kaiser keeps the monthly premium money my employer gives them, then I can transfer that money to my own bank account right?

Once a year, at the end of the year, I'll tranfer that $$ from Kaiser to my Custodian. That's how I understand it
Last edited by outdoorsygal on Tue Aug 16, 2016 1:18 pm, edited 2 times in total.

outdoorsygal
Posts: 91
Joined: Fri Aug 05, 2016 5:29 pm

Re: Another Basic Health Savings Account Question

Post by outdoorsygal » Tue Aug 16, 2016 1:13 pm

mhalley wrote:If you are planning on paying your health bills now and letting the hsa grow until after age 65, you are going to want an hsa that pays >1%. Does this hsa provider have a brokerage option?
Use this to find an hsa provider with low fees and a brokerage option.
https://www.hsasearch.com/

mhalley yes I am planning on paying my health bills myself and letting the $$ grow until age 65 when I can withdraw without the 20% penalty

It seems Kaiser Permanente would have their own HSA custodian. I'll phone them to see, and find out about brokerage options. And google it.

First Tech offers 1% so letting it sit until 65 is good. They also offer share certificates (aka certificates of deposit) , here's the link. In California, it can be better to get Treasury Bonds since they are not taxed on the State level and the others are. So far, I haven't found that option or if I did, the yield was much lower than the share certificates

https://www.firsttechfed.com/bank/compare_certificates. 36 months is 1.34% and 60 months is 1.74%

mhalley
Posts: 5179
Joined: Tue Nov 20, 2007 6:02 am

Re: Another Basic Health Savings Account Question

Post by mhalley » Tue Aug 16, 2016 5:55 pm

Again, how is 1% good? It is below inflation. If you were going to pay current expenses, that would be fine. If you are going to invest the money until you are greater than 65, then it needs to be INVESTED. But it's your money, do with it as you will.

User avatar
tfb
Posts: 7736
Joined: Mon Feb 19, 2007 5:46 pm
Contact:

Re: Another Basic Health Savings Account Question

Post by tfb » Tue Aug 16, 2016 6:25 pm

outdoorsygal wrote:So Kaiser keeps the monthly premium money my employer gives them, then I can transfer that money to my own bank account right?

Once a year, at the end of the year, I'll tranfer that $$ from Kaiser to my Custodian. That's how I understand it

Unless you are misusing the term "premium" there is no money for you to transfer. Premium is just the price of insurance. Kaiser takes it in order to provide you insurance. Think auto insurance premium, homeowner insurance premium. That money is gone. You don't get it back from the insurance company at the end of the year.
Harry Sit, taking a break from the forums.

outdoorsygal
Posts: 91
Joined: Fri Aug 05, 2016 5:29 pm

Re: Another Basic Health Savings Account Question

Post by outdoorsygal » Tue Aug 16, 2016 6:33 pm

tfb Maybe I've made a HUGE assumption here. :oops: but I hope not. Edited-

With all of the youtube videos I've watched+ the HSA Dummies book, I believe my HDHP w/HSA attached is not like your homeowners insurance example. You don't loose it. The premium paid is not gone but stored into an account. Then I can transfer that stored up premiums into my HSA bank account.$290.51 per month specifically for me at age 47 (pays for my HDHP)


At age 65, it can go to pay my property tax, food, travel, etc..it is not restricted to qualified medical expenses though it can still be used for medical expenses. It can be used for ANYTHING even a trip to the Bahamas because it is money. It is not a gfit certificate though it sort of acts as one, a restricted gift certificate to be used on designated medical issues. (Doctor, pharmacy, hospital and a few others) up until age 65. And if i use the money for a trip to the bahamas, well only about half of that money is gone. Gone to Uncle Sam in the form of being listed and paid on my tax return before age 65

.

.
Last edited by outdoorsygal on Tue Aug 16, 2016 8:24 pm, edited 3 times in total.

outdoorsygal
Posts: 91
Joined: Fri Aug 05, 2016 5:29 pm

Re: Another Basic Health Savings Account Question

Post by outdoorsygal » Tue Aug 16, 2016 8:02 pm

mhalley wrote:Again, how is 1% good? It is below inflation. If you were going to pay current expenses, that would be fine. If you are going to invest the money until you are greater than 65, then it needs to be INVESTED. But it's your money, do with it as you will.


Well I can do share certifcates which is up to 1.74%. But yeah, that is measly money at 1.74% for sure. Thanks for re-iterating that logical point of not saving up receipts until old age if I am not going to invest. I am still leaving that open and looking into finding classes to learn how to invest.

I eat organic and cycle so see no medical issues coming up in the future until I am much older.

.
Last edited by outdoorsygal on Tue Aug 16, 2016 9:37 pm, edited 1 time in total.

mhalley
Posts: 5179
Joined: Tue Nov 20, 2007 6:02 am

Re: Another Basic Health Savings Account Question

Post by mhalley » Tue Aug 16, 2016 9:18 pm

Great that you take care of yourself but illness/injury can happen to anyone. You are in the right place to start learning how to invest. The Wiki has a great intro, that includes videos if you don't like to read. I would recommend starting with these wiki articles, then read some of the recommended books. Bogleheads will be happy to help with any questions.
https://www.bogleheads.org/wiki/Getting_started
https://www.bogleheads.org/wiki/Asset_allocation
https://www.bogleheads.org/wiki/Three-fund_portfolio
https://www.bogleheads.org/wiki/Books:_ ... nd_reviews

niceguy7376
Posts: 1821
Joined: Wed Jul 10, 2013 2:59 pm
Location: Metro ATL

Re: Another Basic Health Savings Account Question

Post by niceguy7376 » Tue Aug 16, 2016 9:38 pm

outdoorsygal wrote:The premium paid is not gone but stored into an account. Then I can transfer that stored up premiums into my HSA bank account.$290.51 per month specifically for me at age 47 (pays for my HDHP)


OP,
I am still concerned about your understanding of health insurance, HSA and difference between monthly cost of insurance and employer contribution to HSA.

I assume you are single. If so you can contribute upto 3350 per year to the HSA as long as your HDHP insurance plan is HSA eligible. Out of this 3350, is your employer contributing 290.51 per month? What is the premium that you pay?

Slow down and put your thoughts and questions properly in the post.

outdoorsygal
Posts: 91
Joined: Fri Aug 05, 2016 5:29 pm

Re: Another Basic Health Savings Account Question

Post by outdoorsygal » Tue Aug 16, 2016 9:39 pm

thanks mhailey :D I really appreciate that.

My eyes are weak with some disabilities so I do more listening (if possible lol) than reading but it's all good information

I'll get on to those links right now. Hope you're having a great evening

User avatar
tfb
Posts: 7736
Joined: Mon Feb 19, 2007 5:46 pm
Contact:

Re: Another Basic Health Savings Account Question

Post by tfb » Tue Aug 16, 2016 9:52 pm

outdoorsygal wrote:With all of the youtube videos I've watched+ the HSA Dummies book, I believe my HDHP w/HSA attached is not like your homeowners insurance example. You don't loose it. The premium paid is not gone but stored into an account.

You gave four numbers in this thread: $20, $338, $208, $290.51. Only you know what they are. If it's a premium it's not stored. If it's stored it's not a premium. Maybe one of the numbers is a combination of a premium and HSA contribution. If you don't know what they are, only you can find out. Otherwise we are all confused and guessing.
Harry Sit, taking a break from the forums.

outdoorsygal
Posts: 91
Joined: Fri Aug 05, 2016 5:29 pm

Re: Another Basic Health Savings Account Question

Post by outdoorsygal » Tue Aug 16, 2016 9:57 pm

Yes tbf at first my employer had a form that read something different as the amount, I apologize for that. She had also left a message confirming the higher amount.

it is $290.51 per month is the premium. They had orignially told me a little more in the message but HR called yesterday and left a message saying this the premium amount and they will not be contributing money directly to my account. Just paying the premiums.

They first wanted my bank information, then called saying they didn't need it. Sorry for the confusion
Last edited by outdoorsygal on Tue Aug 16, 2016 10:04 pm, edited 2 times in total.

outdoorsygal
Posts: 91
Joined: Fri Aug 05, 2016 5:29 pm

Re: Another Basic Health Savings Account Question

Post by outdoorsygal » Tue Aug 16, 2016 10:02 pm

niceguy7376 wrote:
outdoorsygal wrote:The premium paid is not gone but stored into an account. Then I can transfer that stored up premiums into my HSA bank account.$290.51 per month specifically for me at age 47 (pays for my HDHP)


OP,
I am still concerned about your understanding of health insurance, HSA and difference between monthly cost of insurance and employer contribution to HSA.

I assume you are single. If so you can contribute upto 3350 per year to the HSA as long as your HDHP insurance plan is HSA eligible. Out of this 3350, is your employer contributing 290.51 per month? What is the premium that you pay?

Slow down and put your thoughts and questions properly in the post.


$291.51 is the monthly premium amount. My employer pays it in full. I pay nothing out of pocket

coldday
Posts: 31
Joined: Wed Aug 17, 2016 4:31 am

Re: Another Basic Health Savings Account Question

Post by coldday » Wed Aug 17, 2016 5:09 am

Outdoorsygal, you may already understand all this and I am just confused by some of your posts, but just in case here's some HSA 101.

HDHP - High Deductible Health Plan has become popular due to the lower cost of insurance premium associated with a higher deductible policy. For people who seldom need medical care this is a savings because they get insurance cheaper and they really only need it in case they become very ill. Employers tend to like it because the premiums paid are lower and many companies were moving in that direction even before the ACA. The drawback of course is that if you do need to go to the doctor you will have to come up with the money for the services up to the amount of your deductible, which is difficult for many people who do not keep adequate savings for such things. Thus, the IRS now allows for

HSA - Health Savings Account. This is money you can put away pretax each year to an IRS-limited amount (as niceguy 7376 explained above, it is $3350 for a single person in 2016). This money is available to you to pay costs if you do need medical care, and the account is limited to only people who have a High Deductible health plan that is qualified for HSA (it has to meet certain criteria). The really innovative thing about these accounts is that unused amounts roll over year to year (as opposed to a FSA Flexible Spending Account) and go with you if you leave the job, they belong to you just as an IRA does. The benefits you mention about funds available after age 65 for other uses than medical is a boon for those who enjoy continued good health and never need the money for that and also for investors taking advantage of all tax-advantaged space available.

As you can see, these are two different things. From some of what you've written, it seems to me likely that your employer is paying $290.51 per month to Kaiser for your High Deductible Health Insurance policy. This is, indeed, much like your car or homeowner's insurance that you pay in case of need though you hope never to have to access. And just like your car insurance, the insurance company does not save up your premiums for you to refund them to you if unused at the end of the year. If I am surmising correctly, the money going to Kaiser is being spent to purchase your insurance.

Some companies make a contribution to an employee's HSA, some don't. None would contribute more than the IRS allowable amount (which $290.51 per month for a single person would be). If you do contribute to an HSA and/or use funds from it, there are forms to be included with your return at tax time so bear that in mind. If I understand your situation correctly, you are just confused about where the money is to come from to fund your HSA. I believe your employer is not making contributions to it so that money comes from you, be sure to claim amounts you contribute through the year as they are deductible (just as if you were funding an IRA) at tax time. If you use this money to pay doctor bills, should they arise, or continue to save it for the future is up to you.

Hope this helps! It can all be very confusing the first few years you have these arrangements. It does help to remember that it is "HDHP w/HSA" meaning two distinct arrangements. You must have an HDHP to qualify to contribute to an HSA but the insurance and the health savings account are two separate things and both cannot use the same money to fund them.

mhalley
Posts: 5179
Joined: Tue Nov 20, 2007 6:02 am

Re: Another Basic Health Savings Account Question

Post by mhalley » Wed Aug 17, 2016 12:18 pm

I wanted to make sure OP understands taxation of hsa after 65. If you use the HSA for medical expenses after age 65, then there is no taxes. If you use it for a trip to the bahamas, then it is taxed at your regular income tax rate. So for the next 20 years, you need to keep all of your health expense receipts to ensure you don't have to pay taxes on the hsa. You can use it for medicare premiums. Note that if the money is taken out before age 65 for non health related expenses, there is a 20% penalty in addition to the taxes.
http://www.ifebp.org/inforequest/ifebp/0166103.pdf

outdoorsygal
Posts: 91
Joined: Fri Aug 05, 2016 5:29 pm

Re: Another Basic Health Savings Account Question

Post by outdoorsygal » Wed Aug 17, 2016 1:28 pm

Quote by coldday-
As you can see, these are two different things. From some of what you've written, it seems to me likely that your employer is paying $290.51 per month to Kaiser for your High Deductible Health Insurance policy. This is, indeed, much like your car or homeowner's insurance that you pay in case of need though you hope never to have to access. And just like your car insurance, the insurance company does not save up your premiums for you to refund them to you if unused at the end of the year. If I am surmising correctly, the money going to Kaiser is being spent to purchase your insurance.


Thank you for all you've wrote and the time you've taken to help me.

I've quoted the above portion of your post to address-This is the IRS phamplet from IRS.GOV (page 9) cut and pasted-
https://www.irs.gov/pub/irs-pdf/p969.pdf

Additional Tax. There is an additional 20% tax on the part of your distributions not used for qualified medical expenses. Figure the tax on Form 8889
Exceptions. There is no additional tax on distributions made after the date you are disabled, reach age 65, or die.

If my employer only pays for my monthly premiums (at about $291 a month) and none of the premium dollars stored each month in the Account to be earmarked for qualified medical expenses... is able to be transferred to my HSA (bank account) after age 65, then for me, there is no point in having an HSA. This is because even if I work until age 70 (I am 47) we will still be low income having our medicare premiums paid for. And I cannot use the HSA to purchase a medigap policy to ensure being fully covered with medicare deductibles & co-insurance. Again, to re-iterate, if any of the $291 premium my employer pays to Kaiser for the HDHP goes to acculmulate to be used for medical expenses (or to be used to cash out without penalty at age 65) then I see no use for the HDHP for myself. Except I will use the Chripractic rider. I am greatful for your help and time :happy and all the info you summed up in your post.
P.S. I just saw mhailey wrote a post to me as I posted this so I'll go read that now which appears to address this issue of cash dispersement after age 65


.
Last edited by outdoorsygal on Wed Aug 17, 2016 1:49 pm, edited 5 times in total.

outdoorsygal
Posts: 91
Joined: Fri Aug 05, 2016 5:29 pm

Re: Another Basic Health Savings Account Question

Post by outdoorsygal » Wed Aug 17, 2016 1:34 pm

mhalley wrote:I wanted to make sure OP understands taxation of hsa after 65. If you use the HSA for medical expenses after age 65, then there is no taxes. If you use it for a trip to the bahamas, then it is taxed at your regular income tax rate. So for the next 20 years, you need to keep all of your health expense receipts to ensure you don't have to pay taxes on the hsa. You can use it for medicare premiums. Note that if the money is taken out before age 65 for non health related expenses, there is a 20% penalty in addition to the taxes.
http://www.ifebp.org/inforequest/ifebp/0166103.pdf

Thank you! that was one of the two main issues I had difficulty understanding. Finally it got thru my thick head

Now it is only if there is even going to be any cash money to take out of my HSA if my employer is only paying the premium amount

I thought the premium, or at least a portion of it, would be stored up at Kaiser and eventually as it accumulated after so many years, I'd cash it out at age 65 (via my HSA & without the 20% penalty).

I just printed up 21 pages of the IRS Health Savings Account Pamphlet and will read it later tonight at work. I have a 24 hr shift today so have time after 10:30 pm tonight to study it more.

.

coldday
Posts: 31
Joined: Wed Aug 17, 2016 4:31 am

Re: Another Basic Health Savings Account Question

Post by coldday » Wed Aug 17, 2016 2:03 pm

Outdoorsygal, the "qualified medical expenses" is referring to things like your deductible (due to having an HDHP you know it is on the high side) if you do need medical care, dental costs that are out of pocket, eyeglasses or contact lenses, etc. (the IRS lists what is allowable somewhere). If you read your Kaiser policy you might find some things that are not covered at 100% even after deductible, it can be used for those. The advantage for many in having an HSA is to give you a place to accumulate as slowly as your budget requires enough to cover any medical costs you might incur not covered by your insurance.

Certainly verify with Kaiser that they will not be holding a refundable amount for you. You don't want to leave any money on the table that you think might be there.

For illustration, how our own HDHP with HSA works is my husband's employer pays most of the premium for our insurance to United Healthcare and he pays for our remaining portion of it through payroll deductions. In addition, in January of each year his employer deposits $500 to our HSA at Optum Health and we fill out the remainder of the IRS allowable contribution through payroll deductions he elects to do through the year (these are separate from the ones that go to our share of the insurance premium). When we incur medical costs claims go to United Health which pays any part it might and applies a network negotiated discount with some providers. Then we know how much the bill we will receive will be for the remainder and we pay it with our Optum HSA debit card, or for smaller bills just pay out of our budget for simplicity's sake. I have an expensive-to-treat autoimmune disease so we know that we will hit our out of pocket maximum (the deductible plus our copays to a maximum amount) every year, so we are not planning on accruing funds for age 65, we pretty well use it at the rate we put it in. The advantage to us is that we get a 15% (our tax bracket) discount on our out of pocket costs (for instance, we pay a $1,000 bill with 1,000 pretax dollars but if we just paid out of our budget we'd be using dollars we had paid taxes on) and we don't have to worry about setting aside in our regular budget the $6,000 or so per year that is our share of medical costs after insurance is applied. Sharing this with you to see that there are different advantages to HSA for different people depending on their circumstance. If you believe that future income will make an HSA not helpful for you as a future savings vehicle you could also consider funding a 401k or IRA to take advantage of the Saver's Credit on your taxes. It will give you a place to save up for that Bahama vacation too if you want it!
Last edited by coldday on Wed Aug 17, 2016 2:56 pm, edited 1 time in total.

SuzBanyan
Posts: 107
Joined: Thu Jun 02, 2016 11:20 am

Re: Another Basic Health Savings Account Question

Post by SuzBanyan » Wed Aug 17, 2016 2:29 pm

OP: Funding you HSA may have value to you even if you don't use it as an alternative "retirement" account.

You will receive a federal tax deduction for funds deposited in the account. That means paying current health expenses with pre-tax dollars. As a result, you should probably deposit money into your HSA every time you incur a medical expense up to the maximum allowed each year and then use those funds to pay the bill.

It sounds like you are in CA, however, which does not give tax benefits for HSAs, so your tax savings is only at the federal level. Still better than nothing.

With a high deductible on your insurance, you can use your HSA to save for that cost. Many people like to have at least the current deductible amount -- or the maximum out of pocket for the year -- so they know they can pay their bills.

hcj
Posts: 261
Joined: Wed Mar 26, 2014 2:21 pm

Re: Another Basic Health Savings Account Question

Post by hcj » Wed Aug 17, 2016 6:22 pm

Sorry if this was covered upthread. I got a little lost.

To the OP: some of what you wrote rings a little bell in my head. Here is how it is set up both at my company and my husband's company, and I am wondering if your employer told you it was going to work this way at first, but later reneged.

This is how it works at both our companies. We both have a choice of health plans:
1) PPO plan -- employer pays higher premiums
2) High deductible plan with HSA -- employer pays lower premiums

Both our employers want to be fair or just want to encourage people to take the HD plan with HSA. So if we choose the high deductible plan, they pay the premium AND contribute an amount to our HSA. We can also choose to contribute additional dollars from our paychecks.

From what you wrote, wondering if your employer was initially going to contribute some money towards your HSA, in addition to paying the monthly premium. And that's why they asked for your HSA account number. And then later on she clarified that they were NOT going to contribute and thus did not need the HSA account information.

Which leaves you with this:
Unless you put money into the HSA, there will not be any money in the HSA. Certainly, the premium is not going to be saved up and refunded later. The premium is the premium, that is Kaiser's monthly fee for you to be insured with them.

outdoorsygal
Posts: 91
Joined: Fri Aug 05, 2016 5:29 pm

Re: Another Basic Health Savings Account Question

Post by outdoorsygal » Thu Aug 18, 2016 1:52 pm

coldday wrote:Outdoorsygal, the "qualified medical expenses" is referring to things like your deductible (due to having an HDHP you know it is on the high side) if you do need medical care, dental costs that are out of pocket, eyeglasses or contact lenses, etc. (the IRS lists what is allowable somewhere). If you read your Kaiser policy you might find some things that are not covered at 100% even after deductible, it can be used for those. The advantage for many in having an HSA is to give you a place to accumulate as slowly as your budget requires enough to cover any medical costs you might incur not covered by your insurance.

Certainly verify with Kaiser that they will not be holding a refundable amount for you. You don't want to leave any money on the table that you think might be there.

Great suggestion, I will do that.

For illustration, how our own HDHP with HSA works is my husband's employer pays most of the premium for our insurance to United Healthcare and he pays for our remaining portion of it through payroll deductions. In addition, in January of each year his employer deposits $500 to our HSA at Optum Health and we fill out the remainder of the IRS allowable contribution through payroll deductions he elects to do through the year (these are separate from the ones that go to our share of the insurance premium). When we incur medical costs claims go to United Health which pays any part it might and applies a network negotiated discount with some providers. Then we know how much the bill we will receive will be for the remainder and we pay it with our Optum HSA debit card, or for smaller bills just pay out of our budget for simplicity's sake. I have an expensive-to-treat autoimmune disease so we know that we will hit our out of pocket maximum (the deductible plus our copays to a maximum amount) every year, so we are not planning on accruing funds for age 65, we pretty well use it at the rate we put it in. The advantage to us is that we get a 15% (our tax bracket) discount on our out of pocket costs (for instance, we pay a $1,000 bill with 1,000 pretax dollars but if we just paid out of our budget we'd be using dollars we had paid taxes on) and we don't have to worry about setting aside in our regular budget the $6,000 or so per year that is our share of medical costs after insurance is applied. Sharing this with you to see that there are different advantages to HSA for different people depending on their circumstance. If you believe that future income will make an HSA not helpful for you as a future savings vehicle you could also consider funding a 401k or IRA to take advantage of the Saver's Credit on your taxes. It will give you a place to save up for that Bahama vacation too if you want it!


Thank you for your own example here. It's much easier to understand that way. When I showed up to First Tech Bank in Rocklin, the Rep who opened the HSA had never opened an HSA. He was just hired from being a Teller at B0fA.I could tell he was highly intelligent, yet had no training really or knowledge on HSA's so my questions didn't get answered. I didn't ask. Planned on showing him HR's emails and asking what they meant, exactly. I should've waited to open the account until I had more knowledge.

Even if I work until age 65, we'd still qualify for Free Medicare Premiums due to being low income. That program my not exist by the time we use it. .My employer doesn't offer a 401K or IRA but I'll check those out to get indepependentl. I am actually paid by the County for half of my hours and a Vendor of the State Regional Center. The Vendor is suppose to count my County hours as "one job" to adhere to the ACA, Gov Brown signed a bill that made it that way. Both jobs (well its one job) offer health insurance so I could pay $10 to get a really good Idemnity Plan which is actually usable. But it only has up to $10,000 Catastrophic but very good Disability & Life ($50,000)

Native Americans who have utilized the Indian Health Service for medical care within the last 3 months may be able to get an HSA's soon, who knows. I am confident Obama would sign it, he is for the Indians. I'd hate to save money in an HSA then have it all taken away because of a mis-calculation. That I used the Indian Clinic a year prior, and still use it for Dental Care once a year. Dental is fine, it's the medical care the law bars from being utilized.

This video is a little over a minute long if you happen to be interested. H.R. 5452 passed the House - https://www.youtube.com/watch?v=Ma_83QPZ4Kw
Last edited by outdoorsygal on Thu Aug 18, 2016 2:04 pm, edited 1 time in total.

outdoorsygal
Posts: 91
Joined: Fri Aug 05, 2016 5:29 pm

Re: Another Basic Health Savings Account Question

Post by outdoorsygal » Thu Aug 18, 2016 1:55 pm

SuzBanyan wrote:OP: Funding you HSA may have value to you even if you don't use it as an alternative "retirement" account.

You will receive a federal tax deduction for funds deposited in the account. That means paying current health expenses with pre-tax dollars. As a result, you should probably deposit money into your HSA every time you incur a medical expense up to the maximum allowed each year and then use those funds to pay the bill.

It sounds like you are in CA, however, which does not give tax benefits for HSAs, so your tax savings is only at the federal level. Still better than nothing.

With a high deductible on your insurance, you can use your HSA to save for that cost. Many people like to have at least the current deductible amount -- or the maximum out of pocket for the year -- so they know they can pay their bills.

Though I have one job, I am paid by the County and a Vendor of the State. Both offer healthcare. Too bad I couldn't use the $10 a month Indemnity plan (pays first, second or third, whenever) with the HDHP. That would make for an almost 100% complete medical and dental care coverage.

Yes I'm in California so would pay the 8% or so State tax on the contributions but save the Federal Tax.

I would save about $75 a month in Federal Taxes if I contributed 50% of my paycheck to the HSA. I'll look into 401k's and IRA's also,good thinking.

.

outdoorsygal
Posts: 91
Joined: Fri Aug 05, 2016 5:29 pm

Re: Another Basic Health Savings Account Question

Post by outdoorsygal » Thu Aug 18, 2016 2:05 pm

hcj wrote:Sorry if this was covered upthread. I got a little lost.
From what you wrote, wondering if your employer was initially going to contribute some money towards your HSA, in addition to paying the monthly premium. And that's why they asked for your HSA account number. And then later on she clarified that they were NOT going to contribute and thus did not need the HSA account information.

Yes that is what occured. She initially asked me for my HSA bank account info but then said she was given incorrect info. They do not contribute to my HSA. Your husband's employer sounds fair and ethical, with our company, the minute they dislike you suddenly your pycheck is docked. Some people are jipped every paycheck having to beg for all of their hours to be paid. This company is not ethical but luckily, it isn't something I endure. And I really like my Clients

Post Reply