Any experience with HSAs?

[honeybunmom]

My new employer offers one in addition to/in lieu of (employee's choice) an FSA account. My prior experience is only with FSA's. The Health care spending account (HSA) must be used in conjuction with a high deductible PPO. I generally don't have any medical needs outside of ordinary care (annual physical/pap, regular dental, etc.). My husband, OTH, runs to the doctor almost every time he is sick. That means 2-3 times during the winter . . . and he has a tendency to want to do the same if our children get sick. And since he's at home with them, sometimes he does.

The HSA is appealing because my employer will kick in $1K every year. Plus, our kids are young and I figure there will be some hospital visit for a fracture, tear, etc. And there could be a need for glasses (both dh and I wear them), braces (I wore them), orthotics (I wore them), etc. And of course, when we age, we may need money for medical care.

I guess because it's new to me, I'm a little leary.

I'd love to hear about anyone's experiences with them.

Thanks in advance!

[Caneel]

How do you feel about the high deductable plan premiums and your family's annual potential out of pocket expenses? If you are comfortable with both, I think HSAs are good.

The bank I worked also owned an insurance agency and often I would sit in on meetings with reps educating customers on high-deductable/HSA accounts.

Overall, I got the impression that if one knew what it fully entailed and could budget for future expenses, an HSA is a very good thing. I believe that the unused money continues to accumulate and is rolled into an IRA type of account down the road.

[honeybunmom]

Originally Posted by Caneel

How do you feel about the high deductable plan premiums and your family's annual potential out of pocket expenses? If you are comfortable with both, I think HSAs are good.

The bank I worked also owned an insurance agency and often I would sit in on meetings with reps educating customers on high-deductable/HSA accounts.

Overall, I got the impression that if one knew what it fully entailed and could budget for future expenses, an HSA is a very good thing. I believe that the unused money continues to accumulate and is rolled into an IRA type of account down the road.

Well, I figure I'll just use the HSA money to pay the deductible. Which is what I used to do with my FSA money. My only concern is that I'll eventually have a sizable amount of money in this account which can only be used for medical expenses. And, if we remain fairly healthy, then what? I would imagine (and I guess this is what I need to confirm), that I can withdraw the money at a penalty rate if I don't use it for medical expenses. Because you're right, it is portable; it's not use it or lose it; and once the savings reach $1500, in this particular case, I can select mutual funds in which it will be invested.

With my FSA, I did have a tendency to overfund and have to buy up contact lenses, or new frames or new sunglasses at the end of the year. So, I'm not great at budgeting. I see the HSA for more of the scenario where something unexpected happens and I have an unexpected medical expense. Or, I might more regularly seek chiropractic, accupuncture or other alternative care that is either not covered by my insurance or caps out each year while I'd like to continue regular, preventive care/maintenance.

Thanks for your response.

[Caneel]

Originally Posted by honeybunmom

Well, I figure I'll just use the HSA money to pay the deductible. Which is what I used to do with my FSA money. My only concern is that I'll eventually have a sizable amount of money in this account which can only be used for medical expenses. And, if we remain fairly healthy, then what? I would imagine (and I guess this is what I need to confirm), that I can withdraw the money at a penalty rate if I don't use it for medical expenses. Because you're right, it is portable; it's not use it or lose it; and once the savings reach $1500, in this particular case, I can select mutual funds in which it will be invested.

Another way to look at any sizable future amount above and beyond what you need to cover a deductable is that you might have spent that money on higher premiums had you not had the HD-HSA program so the money would have been gone anyway and you wouldn't have had access to it. KWIM?

As far as withdrawing and paying the penalty, many scenarios could be outlined about how bad or not-so-bad that might be, sometimes that isn't the end of the world thing it is often made out of be.

I would end up doing the same thing my my FSA too.

I would really like to do a HD-HSA at our company but I don't think our employees could deal with it.

[blazer]

We have used HSA accounts for several years, The first funded by SO employer and himself for 3 years and mine for the last year after he started staying at home. At this point we have just under 7K in ours right now (my deductible is $2,500). Our premiums for family coverage at work rose to $857 a month so I moved them to an individual plan for $300 a month but their deductible is now $5K individual and 10K family. Last year I put in $200 a month, but I also had some physical therapy on my knee for a 2 months so we used some of it.

We dropped our HSA monthly funding from my paycheck to $100 a month at this point. So in our mind worst case senerio if someone gets seriously ill or has an accident then at least we have the money to reach out deductible for that year. If we stay relatively healthy then we will stop or adjust down the monthly contibution to $50 a month once we hit $8,500.

In my mind it is pretax money so I use it for OTC meds, parking at doctors visits if needed. You can use it for contacts/glasses/braces.

The % interest is not super high so as we drop funding the HSA then we move that money into another savings account.

I love my HSA, It is such a relief to kno w that any medical expenses do not come out of our "monthly take home budget" that it is already done and taken care off.

[34me]

I always fund my health care reimbrsement account and when we had a high deductable plan I did that because I didn't know enough abouth the HSAs. But..... braces are $5000+ around here so the money can go quick if the kiddos do wind up needing them.

[sunnysandiegan]

We had an HSA for 12 months, spanning two tax years. LOVED IT!!!!!! Wish the company kept it as an option. However, DH's company is super small (3 FTEs + 2 partners/owners + 1 PTE and less than 5 people are on the plan total) and the cost became too great. (Company covers employees premiums 100%, spouses/children 0%.)

I think an HSA is way better than a FSA, but education is key. You can read up on it at the IRA website and other places. Although we are no longer allowed to contribute, we are allowed to use the funds for qualified expenses until the balance is zero. We earn ~1.5% interest, which is piddly but better than other savings vehicles right now. I had been planning to start investing through the HSA with the second year's contributions, but am unlikely to do that now. We think of it as a dedicated healthcare account, just like an IRA is a dedicated retirement account. Neither set up is designed to be the end-all, be-all for each purpose, but they both provide tax benefits and help people set aside money for specific purposes. We also save money elsewhere for "undedicated" purposes.

[BetsyS]

This is our first year with a HSA and a high deductible plan. When we signed up, I misunderstood the high deduct plan, and I thought that the deductible/out of pocket applied to each individual person. NO! Because we have a family plan, we have to pay the entire family deductible and out of pocket each year.

With our plan, that's a $4500 deductible and a $10,500 out of pocket. The company does contribute $2000 towards the HSA, though.

However, coming up with an additional $8500 (we're having a baby this year) has been a bit hard.

So, go into it with your eyes wide open about the worst case scenario (in case someone is hospitalized/ill).

[honeybunmom]

Originally Posted by BetsyS

This is our first year with a HSA and a high deductible plan. When we signed up, I misunderstood the high deduct plan, and I thought that the deductible/out of pocket applied to each individual person. NO! Because we have a family plan, we have to pay the entire family deductible and out of pocket each year.

With our plan, that's a $4500 deductible and a $10,500 out of pocket. The company does contribute $2000 towards the HSA, though.

However, coming up with an additional $8500 (we're having a baby this year) has been a bit hard.

So, go into it with your eyes wide open about the worst case scenario (in case someone is hospitalized/ill).

Our deductible is $2400 for a family. As I understand it, we pay the deductible for services for which there is a co-insurance payment (normally 15% in our case), not regular well being visits which are fully covered under this plan. The out of pocket is a maximum of co-insurance that we would pay under the plan before coverage was 100%.

Are you sure that you have no maternity hospital stay covered until you reach your out of pocket? I know that is possible, but it seems to me that a co that is contributing $2k to the HSA wouldn't be that stingy.

[Farmer'sWife]

We have a high deductable HSA plan. We are self-employed and we only fund it as needed because the interest rate is so low, it doesn't make sense to have money sitting there earning 1% when we are paying business operating loans at 6+%. I know many people don't the the cash readily available to cover the large deductable, but if you do this is another way to use it for the tax benefit.

[blazer]

Another thing to think about regarding the interest rate of money sitting in HSA accounts
Even though you may only be making 1-2 % on the money, you are using "pretax money" do for us it is like a full earned dollar for every medical expense I have, whereas if I used post tax net money for every dollar i earn really I am only netting .75 cents, so to pay a $75 office visit, out of my HSA it truely is $75 that i earned where if I did not have it I would have to "earn" $100 (net take home after tax $75) to pay that amount.

[goldingoddess]

You can see my thread about our HSA experience here http://www.mothering.com/discussions...+goldingoddess

We had a $10,000 max out of pocket that we have to pay this year. It has been financially devastating for us, We switched to a lower deductible (still HSA) plan which is slightly better, but we'll still be screwed if anything major happens next year. I'll tell a little story that defines out mindset as HSA insurance owners;

My stepdad was here last week and broke his fingers in my garage, he has a PPO and wanted to go to Urgent Care, he did end up going. As HSA insurance owners we would have stayed home in that situation and not gotten care because the thousands of dollars spent on that Urgent Care visit would not have been OK for us. It leaves us with a hard decision to face when medical care in necessary.

Even when my son got his 3rd degree burns, as I was calling 911 I was already stressing about the $10,000 we would be paying eventually.

God I hate HSA plans and wish I had a better option.

[honeybunmom]

Thank you everyone for your input. This has really helped me to drill down on the details and make sure I understand them. My employer only offers PPOs at this time, so, aside from well visits, there is going to be co-insurance whatever I choose. In the worst case scenario, we'd reach the out of pocket maximum of $12K (after which coverage at 100% would kick in) if 1) we went out of network under the high deductible and 2) had hospital bills to the tune of $34,285, because, in this case, our co-insurance would be at 35%. Since I had both of my kids at home at a cost of 20% of a $2800 and $3500 fee, respectively, I'll admit that I'm naive about hospital costs.

But, I could pay a $12K bill if I had to (after working out a payment plan of course!)

And, if I stay in network, the out of pocket maximum is $6000 and the deductible is only $2400. So, the hospital fees would have to reach $40,000 before I completely paid my share and was then covered 100%

So, I like the idea of being able to roll my savings over every year to meet that $2400/$4800 family deductible which will be a new bill every calendar year. And, with the HSA, this bill effectively becomes $1400/$3800 because my employer will be contributing $1000 each year.

I hope I have this right. If anyone reads this and sees a flaw in my understanding based on the premises I laid out, please let me know. Really taking the time to digest this stuff is new to me. Thanks!

[BetsyS]

My maternity coverage (really, any coverage save 1 well visit per person per year) kicks in after the $4500 deductible. Then, the insurance pays 80% (we pay 20%) to an out of pocket of $10,500.

My births are hospital births (I've had 2 c-sections), so it's not unquestionable for my total bills to be around $35,000. We're hoping for less, of course, but that's not totally out of line around here.

[adorabelle]

The only thing that concerns me about a HDHP is that you have to meet the deductible before things are covered. If you don't have the funds, I wouldn't recommend it.

[MissinNYC]

I love my HSA, and I think they are the key to improving health care costs in this country. Yes, you have to have some money saved up for the deductible, but it forces you to make more careful and rational decisions about your care and to really take control of your own care and health.

[honeybunmom]

Originally Posted by adorabelle

The only thing that concerns me about a HDHP is that you have to meet the deductible before things are covered. If you don't have the funds, I wouldn't recommend it.

This is the case regardless of whether it is a HDHP or a regular PPO - at least in my experience . . . and, again, that is only with respect to visits that require the participant to pay co-insurance (so, for me, it would exclude well visits). Plus, I confirmed with HR this afternoon that I can use my HSA money to pay the deductible.

[honeybunmom]

Originally Posted by BetsyS

My maternity coverage (really, any coverage save 1 well visit per person per year) kicks in after the $4500 deductible. Then, the insurance pays 80% (we pay 20%) to an out of pocket of $10,500.

My births are hospital births (I've had 2 c-sections), so it's not unquestionable for my total bills to be around $35,000. We're hoping for less, of course, but that's not totally out of line around here.

Wow; I had no idea.

[goldingoddess]

Originally Posted by MissinNYC

I love my HSA, and I think they are the key to improving health care costs in this country. Yes, you have to have some money saved up for the deductible, but it forces you to make more careful and rational decisions about your care and to really take control of your own care and health.

I'm sorry but I think this way of thinking is really backwards. The key to improving health care costs should not be because we (individual people) are deciding whether or not to go to the doctor when we are really sick or injured because we can't afford it and will have to go into debt because of it. Besides this does nothing to improve health care costs, it just puts people into debt while the HCP and Insurance companies are raking it in and time with the Dr. is still too short and harried. The key to improving health care costs is much more complicated and lies mostly in the form of industry reform, preventative care and properly addressing the obesity epidemic.

Tell me if you still love your HSA compatible plan after an accident with a two-week hospital stay the week before your deductible year rolls over.

[sunnysandiegan]

Julia -- I love my HSA and stated so above. I agree with both you and MissinNYC about keys to reform healthcare. I don't see it as either or, black and white. HSAs are separate from High Deductible Healthcare Plans. I am not a fan of HDHPs, but I am a fan of HSAs. Right now, you have to have a HDHP in order to have a HSA. The opposite is not true. At this moment, we are stuck with a HDHP that does NOT qualify for a HSA. It *should* quality since it has a $10,000 family deductible, but for reasons I've forgotten because they are nonsensical - it is not eligible. This is soooo often the case right now for many people. At least an HSA offers tax benefits and more control over certain aspects of your own healthcare. Healthcare reform isn't going to happen overnight. One baby step at a time. I, for one, plan to celebrate each step and hope for the best (along with write legislators, etc, which I do).