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Thread: Health Savings Accounts

  1. #1
    God/dess LAChloe's Avatar
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    Default Health Savings Accounts

    I am working on getting health insurance for Jan 1, 2014. I am making myself confused.

    Does anyone have a health savings account? Do you recommend it? The reason that I am thinking about opening one is because I do Reiki and I read that you can write it off if you pay from a health savings account. Does anyone know anything about that?

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    Featured Member Vamp's Avatar
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    Default Re: Health Savings Accounts

    Health Savings accounts can be a great tool.

    If you have health insurance with a deductible, you can open a health savings account.

    The money you put into a health savings account can be a write off when the money is used to pay for the deductible.

    Talk to a tax professional for the complete details.

    Edit to add: You can open a health savings account with any bank.
    Last edited by Vamp; 12-27-2013 at 09:29 AM.
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    Default Re: Health Savings Accounts

    without elaborating too much ...

    Be aware that not every health insurance plan which has a deductible is 'qualified' for pairing with a Health Savings Account. Federal law establishes that HSA 'qualified' High Deductible Health Plans must have particular ranges of deductibles, particular ranges of out-of-pocket maximums, and a minimum 'actuarial value' ... which is a function of the plan's potential 'cost sharing' between the insurance buyer and the insurance provider. To open a new Health Savings Account, you must first purchase a 'qualified' HDHP.

    The ACA / HHS has established that 'qualified' HDHP's must now have a minimum 'actuarial value' of 60%. In the past, many HDHP's had 'actuarial values' below 60% ... since the intention was to offer lowest possible cost monthly premiums in exchange for coverage that primarily covered 'catastrophic' events. Thus 'qualifying' HSA pairable HDHP's for 2014 are expected to have more expensive monthly premium costs than in the past. Where public health exchange insurance offerings are concerned, your particularly county may or may not offer a 'qualified' HSA pairable HDHP ... and if such a plan is offered it is most likely to be a 'bronze' plan. All major insurance companies offer 'qualified' HSA pairable HDHP's via the 'private market' ... but if you purchase insurance via the 'private market' instead of through a public health insurance exchange, you may be sacrificing available taxpayer funded subsidies that would effectively reduce the cost of the public health insurance exchange's 'qualified' HDHP's monthly premiums ( as well as the exchange's 'standard' insurance monthly premiums ).

    A few insurance companies do still offer 'NON-ACA qualified' HDHP's that still have an extremely low monthly premium cost, thanks to very limited insurance coverage these plans provide i.e. 'catastrophic only', but resulting in an 'actuarial value' below the new 60% minimum. However, since these plans do not qualify as 'minimum' insurance coverage under the ACA, anybody purchasing such NON-ACA qualified HDHP's will also now also have to pay the new IRS penalty tax of 1-2-2.5% of their income ( in 2014, 2015 and 2016 respectively ) for failure to purchase 'qualified' insurance coverage. Because of this new IRS penalty tax, it is expected that NON-ACA qualified HDHP's will cease to be offered beyond this year, since the increasing size of the IRS penalty tax next year will probably exceed potential monthly premium 'cost savings' with a NON-ACA qualified HDHP for most potential buyers.

    I'm in full agreement with Vamp that, given the recent changes in laws and regulations affecting HSA's + HDHP's, it's now a very good idea to consult a tax professional. The recent changes in regulations affecting any new HSA + HDHP scenario, as well as the new taxpayer subsidized public health exchange insurance 'standard' plans now available, have potentially created possibilities that the tax savings plus other costs resulting from a HSA + 'qualified' HDHP may no longer result in 'automatic' net savings versus the total costs of 'standard' insurance through the public health insurance exchanges.
    Last edited by Melonie; 12-29-2013 at 06:16 AM.

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    Default Re: Health Savings Accounts

    I have an HSA account that I opened back in March 2013.. I just put 7 bucks a week into it.. but I don't even have a health insurance attached to it.. Haven't even got that far.. pretty confused about it actually. But I continue to put money in there just in case and they sent me a credit card to use for medical and dental stuff.. yea never got around to getting insurance yet.. I just thought of it as well it's dedicated to those kind of expenses so I do have some money set aside and saved up in case I need to go to the doc's or hospital or get a prescription.. I dunno really?? I guess we'll see what happens when I do my taxes.. I only have about 187 in it so far,...hhmmmm?

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    Banned Melonie's Avatar
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    Default Re: Health Savings Accounts

    ^^^ It's fortunate that you had opened a HSA account prior to the new regulations ... which now require the purchase of an HSA pairable HDHP plan as a pre-requisite for opening a new account.

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    Default Re: Health Savings Accounts

    *BUMP*

    Okay so... HSA... is it a PPO? I see all the plans listed as either HMO, PPO, or HSA. I think I'm interested in an HSA now that we are required to have insurance.

    Right now I have an HMO (fml) until the end of the month. Then I switch to a PPO, and I'm going to see all the doctors I have been putting off now that I haven't had insurance for like 3 or 4 years. Once I get through with all of those, I want to switch to an HSA.

    But how does an HSA work exactly? What percentage of the money you put into it, can you take out for doctor/dentist visits? How much of your monthly health insurance payment is actually going toward your HSA? Do you open one through your bank or through your medical insurance company? Do you get to pick the bank? Can it be attached to your current checking and savings accounts? Do your completely lose everything in your HSA if say... you get married and your spouse has superior insurance through his job (hypothetical)?

    Are HSAs like Roth IRAs for your body??? I don't understaaaaaaand!

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    Default Re: Health Savings Accounts

    ^^^ a Health Savings Account is exactly and only that ... a bank account to which specific tax preference rules apply. In a nutshell, if you follow the tax rules, HSA's allow money spent on medical treatments ( not on health insurance premiums ) to avoid income tax. Operationally, HSA's must be used in conjunction with a HSA 'qualified' health insurance plan ... which is a totally separate entity you must purchase.

    HSA's also introduce gov't restrictions and penalties on moneys placed into the account being withdrawn for purposes other than payments for medical treatments in conjunction with a HSA 'qualified' health insurance plan ... thus from one viewpoint HSA's are 'cousins' to IRA's, 401's etc. Also, like IRA' and 401k's, any money 'contibuted' to a HSA is automatically reported to the IRS ... which strongly implies a need to report and pay taxes on enough income to 'explain' to the IRS how you were able to afford to make those HSA 'contributions' after paying normal living expenses, plus making mortgage / lease payments, car loan payments, tuition payments, public health exchange insurance premium payments, etc. which are also automatically reported to the IRS.

    The nature of available HSA 'qualified' health insurance plans varies widely, depending on whether the health insurance plan is being offered on the 'private' market, being offered via a public health exchange, etc. So available HSA 'qualified' health insurance types have to be investigated for your specific state 'private' market / county public health exchange offerings. Generally speaking, public health exchange offerings of HSA 'qualified' health insurance will be 'bronze' level with high co-insurance percentage plus high deductibles and high out-of-pocket limits, with severely restricted 'network' providers. See for discussion and an example of some typical offerings.

    If the PPO you are switching to is not HSA 'qualified', and according to various sources only 20% or so of PPO health insurance plans ARE HSA 'qualified', then using a HSA is off the table.
    Last edited by Melonie; 01-11-2014 at 05:17 AM.

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