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I have a question about eligibility for setting up a HSA. I've read that you can not set one up if the annual total of your medical insurance premiums PLUS the total for your deductible amounts to more than $11,200. Is this accurate, or did I misinterpret the jumbled mess of info I was reading? Please someone help me out with this......I have called some banks about it and they either don't offer HSAs or they don't have a clue about the eligibility details. Thanks much!!!!
That can't be right but maybe. I do know that you have to have a qualifying high deductible plan to have a HSA. Not all high deductible plans qualify and often plans with only a $1200 deductible qualify. It is very confusing.
Thanks for your input. I have continued surfing the Web and finally found an institution that provided a live customer service person who was very helpful in answering my questions. She advised that I was misinterpreting what I read.....the monthly insurance premiums I pay are NOT included in the calculation in determining your annual out of pocket expenses. She says the max out of pocket allowable is $11,600 for year 2009, so we are eligible. Basically, your max out of pocket is whatever your policy deductible is written for....in our case, $7,000. Hope this info helps others who are trying to wade through confusing info on this topic.
I don't know what your situation is, but you might want to wait on setting up an HSA with all that is going on with the health care debate. I'm not saying to not save money for health care if that is a priority of yours, but you just might to adopt a "wait and see" approach while this whole debacle plays itself out.
I don't know what your situation is, but you might want to wait on setting up an HSA with all that is going on with the health care debate. I'm not saying to not save money for health care if that is a priority of yours, but you just might to adopt a "wait and see" approach while this whole debacle plays itself out.
Why??? A HSA is just a savings account to use for medical expenses. You don't even have to put any money into the account. If things change they will have some provision for the HSA's if not, you are not out anything. If you need to spend the money in your HSA because of some law change, get some new glasses or whatever.
As it stands right now HSA's are fantastic if you use them to their full potential. If you can afford to fully fund your HSA each year ($5900 or so each year) you can let that money sit in there until retirement, it grows tax free and if used for qualified medical expenses used tax free. It is doublely good if your employer funds some or all of that for you as it is not considered income tax to you. At age 65 or older you can use the money in an HSA to pay your Medicare supplement plan premiums. . It is a great way to prefund that.
Why??? A HSA is just a savings account to use for medical expenses. You don't even have to put any money into the account. If things change they will have some provision for the HSA's if not, you are not out anything. If you need to spend the money in your HSA because of some law change, get some new glasses or whatever.
As it stands right now HSA's are fantastic if you use them to their full potential. If you can afford to fully fund your HSA each year ($5900 or so each year) you can let that money sit in there until retirement, it grows tax free and if used for qualified medical expenses used tax free. It is doublely good if your employer funds some or all of that for you as it is not considered income tax to you. At age 65 or older you can use the money in an HSA to pay your Medicare supplement plan premiums. . It is a great way to prefund that.
You missed my point completely. I'm not saying HSAs are bad; all I'm saying that the OP may want to reexamine her choice of investing in a HSA because this health care debate may very well lead to drastic changes in how we receive (and pay for) our health care. Again, I don't know the OP's specific situation so I'm hesitant to say that an HSA is or isn't the right choice for them.
You missed my point completely. I'm not saying HSAs are bad; all I'm saying that the OP may want to reexamine her choice of investing in a HSA because this health care debate may very well lead to drastic changes in how we receive (and pay for) our health care. Again, I don't know the OP's specific situation so I'm hesitant to say that an HSA is or isn't the right choice for them.
Nothing is going to happen for at least a year, probably several, why wait for something that may or may not happen?
why wait for something that may or may not happen?
I'm not saying wait and don't save...I'm saying fully investigate the ins/out of HSA before dumping your money into them. The OP admitted that the rules/regulations of HSA plans confusing and that they do not fully understand them. Not a good start to a solid investment plan!
The thing about government mandated investment programs (IRA, HSA, FSAs, etc) is that its a carrot/stick deal. The "carrot" is the big tax savings to contribute to these plans, the "stick" comes in when you want to use the money for something other than what the plan is set up for. If a person wants to use HSA funds for non-medical expenses then Uncle Same hits you big time with taxes and penalty fees.
I'm not saying these plans are bad, but they are not all created equal either. I would suggest that everyone contribute fully to an IRA because there is a 100% chance you are going to retire and use that money (or die and that spouse can use that money). Health costs, on the other hand, aren't as certain and can be more variable. People have to decide for themselves if the tax savings are worth tying a portion of your income up for health-care related expenses versus paying the tax on that money and having that money available for other expenses/investments.
As the health care reform debate, one of the things that will hopefully come out of all of it is more competitively priced healthcare....despite where we all come down on this debate, I think we can all agree that our healthcare expenses are horribly overpriced. What happens to the person who has been saving like mad in their HSA to afford horribly overpriced healthcare and now their expenses are half what they expected them to be?
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. It is a great way to prefund that.
