HSA- pregnancy question

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miketherunner10
Posts: 7
Joined: Fri Apr 12, 2019 7:16 pm

HSA- pregnancy question

Post by miketherunner10 » Mon Dec 09, 2019 3:55 pm

My wife and I have been married for 2 and a half years and we just found out she is pregnant and due mid August. In saying that, I know delivery costs are super high so I want to find the best way to do this financially. We have a high deductible health care plan and we file joint tax returns and we are 29 years old. I work self employed and she works as a resident at a hospital so the health insurance is through her.

In saying all this, she is not offered an HSA but rather she was offered an FSA. I don't want to do an FSA but want to enroll in an HSA. I just want to confirm that I can open an HSA given our current situation from a provider outside of the hospital since she was not offered one. I believe the contribution limits are $7,100 for us filing jointly. We already are enrolled in short term disability for us so I know we will get a percentage of her salary.

1.) Can we open up an HSA from a private insurance company?
2.) Are there any deadlines other than when taxes are due to contribute to an HSA? /Can use use those funds right after we would contribute?
3.) Lastly, any other advice to help minimize the costs of appointments/delivery?
4.) Who would you recommend us to open up an HSA through/who to stay away from?

I already have enough money set aside to pay for it all but I could use any advice from a financial standpoint. Thanks.

lstone19
Posts: 755
Joined: Fri Nov 03, 2017 3:33 pm

Re: HSA- pregnancy question

Post by lstone19 » Mon Dec 09, 2019 4:50 pm

miketherunner10 wrote:
Mon Dec 09, 2019 3:55 pm
My wife and I have been married for 2 and a half years and we just found out she is pregnant and due mid August. In saying that, I know delivery costs are super high so I want to find the best way to do this financially. We have a high deductible health care plan and we file joint tax returns and we are 29 years old. I work self employed and she works as a resident at a hospital so the health insurance is through her.

In saying all this, she is not offered an HSA but rather she was offered an FSA. I don't want to do an FSA but want to enroll in an HSA. I just want to confirm that I can open an HSA given our current situation from a provider outside of the hospital since she was not offered one. I believe the contribution limits are $7,100 for us filing jointly. We already are enrolled in short term disability for us so I know we will get a percentage of her salary.

1.) Can we open up an HSA from a private insurance company?
2.) Are there any deadlines other than when taxes are due to contribute to an HSA? /Can use use those funds right after we would contribute?
3.) Lastly, any other advice to help minimize the costs of appointments/delivery?
4.) Who would you recommend us to open up an HSA through/who to stay away from?

I already have enough money set aside to pay for it all but I could use any advice from a financial standpoint. Thanks.
Are you sure this plan meets all the requirements of a High Deductible Plan? It takes more than having a high deductible to qualify. It can pay nothing (except for preventive care) until the deductible is met. No just paying a co-pay or anything like that while the deductible is not met. It's unusual to offer a qualifying HDHP but not have an HSA attached to it.

To answer your questions:
1) HSAs are a banking product, not an insurance product. However, most HSA administrators are specialized banks (or bank-like businesses).
2) I believe your tax deadline is your contribution deadline. Funds can be used right away for expenses incurred after the HSA was opened so getting it open quickly is important. But don't open it until you're under qualifying insurance.
4) Fidelity. No fees there. Most specialized administrators seem to be competing to see who can have the highest fees (my wife just moved the bulk of her balance from Payflex to Fidelity after Payflex introduced a percentage fee on investments "to align with industry standards". Current contributions through her employer will still go to Payflex but as of today, there's a near-zero balance there).

Big Dog
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Joined: Mon Sep 07, 2015 4:12 pm

Re: HSA- pregnancy question

Post by Big Dog » Mon Dec 09, 2019 5:08 pm

reinforcing point above. Since your wife was offered a FSA, I am guessing that their HD plan is not HSA-qualified. She should ask HR before you do anything else. (protip: not all HD plans are HSA qualified and those that are, are usually so labeled.)

GuyFromGeorgia
Posts: 142
Joined: Sat Dec 29, 2012 12:16 pm

Re: HSA- pregnancy question

Post by GuyFromGeorgia » Mon Dec 09, 2019 5:13 pm

First off, congrats. Regarding the FSA, read the fine print to see if it is a "limited-use" FSA. I have a qualifying high deductible plan so I don't qualify for a standard FSA, but I do qualify for the limited-use FSA. The limited use FSA is only allowed for qualifying charges, such as medical, dentist, or vision expenses. I would have your wife reach out to someone in HR to confirm if the plan is qualifying HD plan.

snailderby
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Joined: Thu Jul 26, 2018 11:30 am

Re: HSA- pregnancy question

Post by snailderby » Mon Dec 09, 2019 5:13 pm

miketherunner10 wrote:
Mon Dec 09, 2019 3:55 pm
My wife and I have been married for 2 and a half years and we just found out she is pregnant and due mid August.
Congratulations!
miketherunner10 wrote:
Mon Dec 09, 2019 3:55 pm
I just want to confirm that I can open an HSA given our current situation from a provider outside of the hospital since she was not offered one.
If you have time, take a look at IRS Publication 969. You can contribute to an HSA if:
- You are covered under a high deductible health plan (HDHP), described later, on the first day of the month.
- You have no other health coverage except what is permitted under Other health coverage, later.
- You aren’t enrolled in Medicare.
- You can’t be claimed as a dependent on someone else’s 2018 tax return.
1.
Can we open up an HSA from a private insurance company?
Yes, if you meet the criteria explained above.

2.
Are there any deadlines other than when taxes are due to contribute to an HSA?
From IRS Publication 969: "You can make contributions to your HSA for 2018 until April 15, 2019. If you fail to be an eligible individual during 2018, you can still make contributions up until April 15, 2019, for the months you were an eligible individual."

Also note that there are special rules that apply if you are only enrolled in an HDHP for part of the year.

4.
Who would you recommend us to open up an HSA through/who to stay away from?
Lively and Fidelity are two good HSA providers.
Last edited by snailderby on Tue Dec 10, 2019 11:32 am, edited 1 time in total.

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Meg77
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Re: HSA- pregnancy question

Post by Meg77 » Mon Dec 09, 2019 5:19 pm

Just want to add that my company offers both FSA and HSA (along with an HDHP compliant insurance option), but the HSA option they provide and contribute to directly via payroll is a checking account. So I invest directly into an HSA with OptumBank instead (because my husband already had one there from a former employer). So having access to the FSA doesn't necessarily mean you can't contribute to an HSA. And you can definitely contribute anywhere even if the employer doesn't offer an HSA directly.

Good plan and good luck!
"An investment in knowledge pays the best interest." - Benjamin Franklin

GuyFromGeorgia
Posts: 142
Joined: Sat Dec 29, 2012 12:16 pm

Re: HSA- pregnancy question

Post by GuyFromGeorgia » Mon Dec 09, 2019 5:23 pm

3.) Lastly, any other advice to help minimize the costs of appointments/delivery?

Regarding this, you're likely to hit your out-of-pocket max. For us, it was $6k. At that point saving money only benefits the insurer. That said, do double check that everything you do is in-network. If there were to be any referrals or specialists along the way, double check them. And keep in mind that your wife's OB doctor might be in-network but the hospital might be different. Double check everything.

You're pretty much going to have all of the expenses in 2020, so no issue with half of the prenatal in one year and everything else in the next. Depending on when you had/will have open enrollment, you might have the opportunity to look at the options. In those, when you know you're going to be maxed in out-of-pocket, you just compare the OOP + paycheck deductions to get a true cost. If you missed your annual enrollment period then the only way to make a change is to have a qualifying life event. Having the baby qualifies, so be sure to add them shortly after birth (within 30 days). Doesn't help you much between now and then.

tjtv
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Re: HSA- pregnancy question

Post by tjtv » Mon Dec 09, 2019 5:52 pm

I always thought that since having a baby is considered a qualifying life event that it would make sense to be on the traditional low-deductible plan for the first part of the year, and then after the baby is born(and it's looking relatively healthy) switch to the HDHP+HSA. This way you get the best of both worlds, low deductible and low out of pocket costs for the expensive things like birth and delivery, but also the ability to enjoy lower premiums and HSA access for the portion of the year where you need relatively less medical care.

sailaway
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Re: HSA- pregnancy question

Post by sailaway » Mon Dec 09, 2019 6:05 pm

tjtv wrote:
Mon Dec 09, 2019 5:52 pm
I always thought that since having a baby is considered a qualifying life event that it would make sense to be on the traditional low-deductible plan for the first part of the year, and then after the baby is born(and it's looking relatively healthy) switch to the HDHP+HSA. This way you get the best of both worlds, low deductible and low out of pocket costs for the expensive things like birth and delivery, but also the ability to enjoy lower premiums and HSA access for the portion of the year where you need relatively less medical care.
This is something you definitely need to run the numbers with. A high deductible plan can sometimes have a lower out of pocket maximum than a low deductible plan.

For a pending birth, it may be worthwhile to look at the limited FSA, as well. You can only use it for vision and dental until the deductible is met, but then it can be used for medical. Why not use both HSA and FSA to save taxes on those expenses?

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