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Anyone have a health savings account for health insurance?

Posted by on Dec. 15, 2008 at 7:51 PM
  • 3 Replies

our nonprofit company is switching to this and i was just trying to get some information on it.  good, bad, things to keep in mind and so forth.  also, can you claim that stuff on your taxes and what not?  any information is greatly appreciated.  thank you.

by on Dec. 15, 2008 at 7:51 PM
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richgirljj
by on Dec. 15, 2008 at 8:04 PM

Yes, I have one and have had one for five years now.  I really recommend it.

How it works, is that money is deducted from your pay PRE-TAX and put away for you to use for medical needs; deductibles, co-insurances, co-pays, prescriptions, glasses, birth control, vaccinations, allergy shots, etc.  AND even some things that insurance may not pay for: some cosmetic procedures, OTC meds, supplements, tubals, etc.

Depending on how it is set up you either are issued a debit card, with the money you allot on it or you pay out of pocket for your expenses and then are reimbursed.  Most commonly is the debit card approach.

The benefits: the money is pre-tax, so you don't have to worry about claiming anything on your taxes.  Also the money is there up-front.  So, for instance, let's say you say you want $1000 in your HSA (health care spending account or FSA, flexible spending account - both mean the same thing).  You get all $1000 at the beginning of the year.  So, if you have surgery, lasik, etc.  you can use ALL $1000 on January 2, while the money is still deducted from your pay the rest of the year.  The other benefits, let's say you have surgery on Jan. 2, your deductible is $1000 and you use your HSA to pay the deductible, then you quit your job on Jan. 15.  You do NOT have to repay the $1000.

The draw-backs:  if you don't use it by the end of the year -  (which in MOST cases is NOT the end of the calendar year, but usually through March 30 for tax purposes)  - you lose it.  The other drawback might be if you aren't sure how much you need.  We didn't do enough this year.  We used ours up within a couple of months.  So, look at your past year's spending on medical costs and use that as a guide.  If  you go to the doctor only two times a year, then figure two times/ year per family member.  If you have prescriptions, figure how often they are refilled and what the cost is. 

If you have any other questions, please ask.  I worked in benefits and HR for nearly 10 years, so I can help answer some questions for you.

 

 

MommyJenny777
by on Dec. 15, 2008 at 8:10 PM

The first lady's post just about covered it. We have on too and we love it. The only draw back that I am discovering at least with ours is that if your Doc asks for the money up front you don't have access to it tax free until the Doctor submits a bill to the insurance and then the insurance submits it to your Flex Spending Acct Company and then they issue the check.  SO if you have to prepay it is a hard process to get the money...at least in our situation.

richgirljj
by on Dec. 15, 2008 at 8:47 PM


Quoting MommyJenny777:

The first lady's post just about covered it. We have on too and we love it. The only draw back that I am discovering at least with ours is that if your Doc asks for the money up front you don't have access to it tax free until the Doctor submits a bill to the insurance and then the insurance submits it to your Flex Spending Acct Company and then they issue the check.  SO if you have to prepay it is a hard process to get the money...at least in our situation.

That must be some type of an agreement by your providers.  I have never heard of that.  If you wanted to be self-pay you would be able to use your HSA for that.  I would double check because if you had a doctor's visit that you didn't want your insurance to know about, you shouldn't have to go through your insurance to be able to use your HSA. 

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