HSA vs. Medical plan

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krafty81
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HSA vs. Medical plan

Post by krafty81 » Tue Aug 13, 2019 4:34 pm

Daughter has new job here in CA. I do not know much about Health Savings Accounts vs. normal medical plans with deductibles. Any thoughts here? Thanks.

CoastalWinds
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Re: HSA vs. Medical plan

Post by CoastalWinds » Tue Aug 13, 2019 4:54 pm

That is a really vague question. You might want to read the wiki to educate yourself a bit on HSA-eligible plans and use of HSAs, and then come back here with a specific question.

BobTexas
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Re: HSA vs. Medical plan

Post by BobTexas » Tue Aug 13, 2019 5:26 pm

krafty81 wrote:
Tue Aug 13, 2019 4:34 pm
Daughter has new job here in CA. I do not know much about Health Savings Accounts vs. normal medical plans with deductibles. Any thoughts here? Thanks.
I think that you are asking about High Deductible Health Plans compared to regular plans. With a HDHP your daughter would pay for most medical care (except for preventative like physicals) but typically the monthly cost is much lower. HSAs are savings accounts used to pay for the medical care that she uses. Workers with HDHPs are allowed to have HSA which can rollover from year to year if you don’t use the entire balance. Only HDHP have HSAs. Younger healthy workers often do well with HDHP as long as they understand the risks involved. Depending on where she works her employer may make a contribution to her HSA which helps. Lots of info here and on the web about this

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RickBoglehead
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Re: HSA vs. Medical plan

Post by RickBoglehead » Tue Aug 13, 2019 5:45 pm

Let your daughter's Benefits Dept take a stab at answering her questions.
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Broken Man 1999
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Re: HSA vs. Medical plan

Post by Broken Man 1999 » Tue Aug 13, 2019 6:05 pm

Make sure your daughter understands that a HDHP might have attractive, low premiums, BUT there might come a time when she will have to pay a high deductible for some medical expense.

Many tales of woe right here in Bogleland of folks finding themselves on the hook for large medical expenses.

A thorough understanding of what she has will help her plan for that possible high expense medical bill. There are reasons a HDHP is attractively priced, one reason is the risk the insured assumes.

Broken Man 1999
“If I cannot drink Bourbon and smoke cigars in Heaven than I shall not go. " -Mark Twain

megabad
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Re: HSA vs. Medical plan

Post by megabad » Tue Aug 13, 2019 6:26 pm

Wiki for HDHP is here

https://www.bogleheads.org/wiki/High_de ... ealth_plan

Other posters are right. An HDHP + HSA can be a great idea for some. Or it can be a poor idea. Just depends on your situation. Generally, younger and healthier people might benefit most from an HDHP + HSA. While others might gravitate more toward a more typical PPO, EPO, or HMO plan. Every case and employer are different though. Make sure the insured understands all pros and cons of her specific plan offerings.

Turbo29
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Re: HSA vs. Medical plan

Post by Turbo29 » Tue Aug 13, 2019 6:47 pm

krafty81 wrote:
Tue Aug 13, 2019 4:34 pm
Daughter has new job here in CA. I do not know much about Health Savings Accounts vs. normal medical plans with deductibles. Any thoughts here? Thanks.
I don't live there but I have seen it mentioned that HSA's are not recognized so far as California income tax goes.

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grabiner
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Re: HSA vs. Medical plan

Post by grabiner » Tue Aug 13, 2019 9:14 pm

Turbo29 wrote:
Tue Aug 13, 2019 6:47 pm
krafty81 wrote:
Tue Aug 13, 2019 4:34 pm
Daughter has new job here in CA. I do not know much about Health Savings Accounts vs. normal medical plans with deductibles. Any thoughts here? Thanks.
I don't live there but I have seen it mentioned that HSA's are not recognized so far as California income tax goes.
Therefore, in evaluating the HSA, consider that you will get only a federal tax deduction, not a state tax deduction. If your employer contributes to the HSA, that contribution is CA-taxable income. And investments in the HSA are taxed by CA, although you can mostly avoid this by investing in Treasury funds since those are exempt from CA tax. (CA will still tax any capital gains on the funds, but most bond funds have very little in capital gains.)
Wiki David Grabiner

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krafty81
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Location: San Diego, CA

Re: HSA vs. Medical plan

Post by krafty81 » Wed Aug 14, 2019 2:56 pm

Thanks for the helpful replies!

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