Anyone have an HSA plan?

[disneysteve]

We're insurance shopping at work. I'm interested in an HSA plan since I have no other retirement plan and I know I can put money into the HSA account pre-tax and leave it there indefinitely. Yes, I can draw on those funds to pay medical expenses, but what I don't spend remains in the account and I can use it in retirement. I'm in a position to fund the HSA for a lot more than I would possibly need for medical expenses.

So any experience with these?

[sweeps]

Are you okay with being covered by a HDHP? If your family goes to the doctor a lot, it may not be worth it, you have to run the numbers.

[disneysteve]

Originally Posted by Sweepsplayer

Are you okay with being covered by a HDHP? If your family goes to the doctor a lot, it may not be worth it, you have to run the numbers.

Not a problem. I'm a physician. We don't pay for much of our medical care.

[sweeps]

Ok, seems like it would be a good move. You probably know this, but the maximum contribution is the amount of your HDHP deductible or $5250 (for a family, $2650 for an individual), whichever is lower.

EDIT: For 2006, the max is $5450 for family, $2700 for individual. Also if you're 55 or over (and not yet enrolled in Medicare), you can make an additional $700 catch-up contribution.

[jmjj215]

Sweeps, what's an HDHP? High-deductible...?

So if you have a standard plan w/ your employer, are you not allowed to also do an HSA?

[sweeps]

High-deductible health plan. Correct, your health plan must have a deductible of at least $1000 for an individual -- $2,000 for a family -- to be eligible to contribute to an HSA.

Lots more info here.

[disneysteve]

Originally Posted by Sweepsplayer

the maximum contribution is the amount of your HDHP deductible or $5250 (for a family, $2650 for an individual), whichever is lower.

That's the appealing part. I could put away that money each year. We definitely don't spend anywhere near that much currently (of course, something could always happen and cost us money - one never knows). If I could put that much away pretax every year from now on, that would be great, even if a portion of it does get spent each year for qualifying expenses. I need to call our payroll company and find out how much they charge for the paperwork and fund transfers. I already looked in to the actual accounts and found a couple with $25 annual fees which is quite reasonable.

[dickyvman]

My question is do can you start saving in an HSA if you already have a healthcare provider through your current employer? I was thinking about starting up a HSA account for retirement healthcare costs, but didn't know if I am eligible to participate? Can someone help answer this question? Thanks.

Dickyvman

[Diolla]

Originally Posted by dickyvman

My question is do can you start saving in an HSA if you already have a healthcare provider through your current employer? I was thinking about starting up a HSA account for retirement healthcare costs, but didn't know if I am eligible to participate? Can someone help answer this question? Thanks.

Dickyvman

You can only contribute to an HSA if you have a high deductible health insurance policy. If you are covered by a traditional plan you cannot contribute to an HSA. Also I don't know if it is this way everywhere but ours requires your HSA to be with a certain banking provider. I have been considering it for when I do retire because it will mean lower HI costs but right now the regular group policy at my work is better.

[MarianneJ]

I have had my eye on these since they were signed into law (December 2003 if I remember correctly). Once I am employed as a hygienist it is likely that I will not have health insurance benefits and possibly no retirement plan either, so the HSA sounds appealing. Luckily we are a pretty healthy family *knocking on wood* and I do have a Roth, but I think the HSA might be our solution.

[jmjj215]

Thanks for the link Sweeps. I just read the whole FAQ So my guess is that if you have a growing family (or are planning on growing it) an HDHP is probably not for you..

[poundwise]

I have a HSA and love it.

There is a catch to the amount you can contribute. The max you can contribute is an amount equal to the deductible your health plan but not greater than the maximum allowed.

For example, as Sweeps indicated, the max for 2006 is $5450 for family. However, if your HDHP deductible is $3600, then you can only contribute $3600 to your HSA for the calendar year. The good news is, of course, that the amount rolls over, so if you contribute $3600 to your HSA and use $2400, then the following year you would start with $1200 and could contribute an additional $3600 for a total balance of $4800 and so on.


The following is cut-and-paste from the US Treasury web site:

How much can I contribute to my HSA each year?
Your annual HSA contribution cannot exceed the deductible of your HDHP. For example, if you choose a plan with a deductible of $1,100, you may not deposit more than $1,100 in your HSA for that year. If you want to save more, you must choose an HDHP with a higher deductible. If you are age 55 or older, you can also make additional “catch-up” contributions (see below).

I have a very high deductible, is there a limit on how much I can contribute?
The most you can put into your account for 2005 is $2,650 if you have single coverage and $5,250 for a family. For 2006, these amounts are $2,700 and $5,450, respectively. These amounts will be increased for inflation in future years.


Also, my recommendation is to set up your HSA with a bank that does not charge a maintenance fee. Most do, but there are a few with no fees (or easy to avoid fees) and several nice features including relatively high yields.

Delat Trust & Bank

US Bank HSA

Cattle National Bank

Jesse I would agree with that. My plan is perfect for me now for everything from the microscopic premium I pay to the company match in the account but I'm single and don't go to the doctor much.

Given a family...no, I don't think I would feel comfortable with a HSA when a reasonable traditional health plan was available to me. It would take a substantial amount of liquidity I could afford to lose to make me feel safe with the high deductible.

[dickyvman]

Also check out http://www.hsaadministrators.com

Dickyvman

[poundwise]

Originally Posted by dickyvman

Also check out http://www.hsaadministrators.com

Dickyvman

Wow. Fees gone wild... link

[Bluezy]

My HSA was rolled over to Delta Trust in May 2006. I recommend Delta in that the HSA's currently yield 5.10 APY and they have stellar reps. You have online access to the HSA account to check balances. A debit card and checks are available (checks ran $10 and some change). There is no monthly service charge.

Contact Details: 888-869-5412

[jmjj215]

I'm interested in seeing HSA's invested in instruments other than MMAs and such. I'd like to have one invested in equities if I could once it hit a certain balance (where we wouldn't have to worry about needing the money if the value was cut in half or something like that).

My main goal is to have an HSA for me and my wife to cover our medical situation in retirement.

Jesse my plan offers just that, the money in the account above $2000 can be invested in a (painfully small) selection of mutual funds. There are also no brokerage fees to move money from the savings portion of the account into a fund and no cost to sell and move it back if needed.

I doubt I'll take advantage of that right away though, I plan to leave enough cash in the account to cover an entire year's out of pocket expenses.

[poundwise]

Jesse/rexdart, I know of at least one HSA account that offers investing through a brokerage. That is, you can invest in virtually any stock or ETF.

There are several that offer investment through a certain select few mutual funds and, from what I've seen, the selection isn't very good and the fees are high.

Unless a better option comes along than what it presently available, I personally prefer to have my HSA in a good MMA and to save investing for my IRA.

[jmjj215]

The idea of having tax deductible and tax-free gains on money devoted entirely to future medical expenses is so sweet. I wonder why this hasn't caught on more to be honest.