The downside of an HSA

[LivingAlmostLarge]

the HSA is a good idea if you have an HDHP. But aren't most people covered by employer plans not HDHP? So they don't have the option to save into a HSA?

[MooseBucks]

the HSA is a good idea if you have an HDHP. But aren't most people covered by employer plans not HDHP? So they don't have the option to save into a HSA?

Employers offer HDHP as (usually) a lower premium cost alternative than a PPO/HMO.

[disneysteve]

the HSA is a good idea if you have an HDHP. But aren't most people covered by employer plans not HDHP? So they don't have the option to save into a HSA?

My HDHP/HSA is through my employer.

[Outdoorsygal]

Employers offer HDHP as (usually) a lower premium cost alternative than a PPO/HMO.

My employer offers about 8-10 different health plans but only the Kaiser HDHP is fully covered so no $$ is deducted from our paychecks.

[Outdoorsygal]

My HDHP/HSA is through my employer.

My concern for you would be you are not using a HSA designated bank account. Banks & CU's have special designated HSA accounts whether savings or checking. Hopefully you are not going to be taxed (if audited) for those distributions.

Another sort of downside to the HSA is, imho, the form which needs to be filed with taxes. Added work for our accountant. https://www.irs.gov/pub/irs-pdf/f8889.pdf

I would rather pay out of pocket and keep receipts, not listing contributions on my taxes. BUT...unlike most people, our income will be higher in retirement than it is now. Those receipts reduce taxable income. I also grab receipts out of the trash can at our local pharmacy when I am there to add to my HSA Receipt box. Whatever left, we may choose to just use for medical expenses in retirement, we'll see.

Another reason why I don't want to wake the sleeping giant is technically, by law, I am not allowed to have an HSA. I am Native American. I guess the IRS thinks we have no right to save for our own healthcare costs. There is a bill introduced in congress to change this but it's doubtful anything will come of it.

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[disneysteve]

My employer offers about 8-10 different health plans but only the Kaiser HDHP is fully covered so no $$ is deducted from our paychecks.

Employers often incentivize employees to go with the HDHP since it reduces insurance costs. As greenskeeper mentioned, that sometimes includes the employer contributing directly to the HSA. I'm not that lucky but the HDHP/HSA was still the best option for me to choose from all of the available plans we looked at.

[Outdoorsygal]

Employers often incentivize employees to go with the HDHP since it reduces insurance costs. As greenskeeper mentioned, that sometimes includes the employer contributing directly to the HSA. I'm not that lucky but the HDHP/HSA was still the best option for me to choose from all of the available plans we looked at.

My employer donates about $275 a month to our HDHP's but it made me nervous as the income grew. I kept reading the law, and understand the basis of Native Americans not being allowed HSA's but it doesn't apply to me. Yet the law still seems to apply to me.
So I changed from an HDHP this year to a non-hdhp paying $35 a mo. I understand if you get free healthcare from a native american clinic that they also don't want you saving for your healthcare. But if you have heath insurance as I do, then why can't I have an HDHP?

Typical office visits, bloodwork, x rays, drugs are all exempt from my HDHP deductible and a set price is applied to these services, all of these services cost under $40 each. I liked my HDHP last year, it covered two services (an office visit & prescription) for a total cost of under $40. We also have dental insurance so the taxpayers don't pay anything for me yet the law applies. The Indian Clinic gives better health care so I don't want to go anywhere else.

[disneysteve]

I'm not familiar with the Native American rules regarding health insurance. That isn't something I deal with here in NJ.

In our case, the HDHP/HSA is great. I'm able to use pre-tax dollars to pay for my daughter's therapy, which isn't covered by insurance, so it's 100% out of pocket. We also use pre-tax dollars for vision and dental care, neither of which is covered by insurance. Plus, DW and I are both at that age where we need to start doing things like colonoscopies and such so we can use the HSA funds toward those costs as well as toward any medical copays.

[Outdoorsygal]

I'm not familiar with the Native American rules regarding health insurance. That isn't something I deal with here in NJ.

In our case, the HDHP/HSA is great. I'm able to use pre-tax dollars to pay for my daughter's therapy, which isn't covered by insurance, so it's 100% out of pocket. We also use pre-tax dollars for vision and dental care, neither of which is covered by insurance. Plus, DW and I are both at that age where we need to start doing things like colonoscopies and such so we can use the HSA funds toward those costs as well as toward any medical copays.

Yes, that's wonderful. I am surprised your employer doesn't offer some type of dental plan considering your line of work but you don't seem to work many hours.

I just hope the type of bank acct you park your HSA funds doesn't end up costing you (taxes) in the end. But you'd need to be audited first, at least

[Outdoorsygal]

I'm not familiar with the Native American rules regarding health insurance. That isn't something I deal with here in NJ.

In our case, the HDHP/HSA is great. I'm able to use pre-tax dollars to pay for my daughter's therapy, which isn't covered by insurance, so it's 100% out of pocket. We also use pre-tax dollars for vision and dental care, neither of which is covered by insurance. Plus, DW and I are both at that age where we need to start doing things like colonoscopies and such so we can use the HSA funds toward those costs as well as toward any medical copays.

I think colonoscopies are free with your health plan and considered preventative care?

[disneysteve]

I am surprised your employer doesn't offer some type of dental plan considering your line of work but you don't seem to work many hours.

I do have a dental plan available but the premium is so high that it makes no sense to take it. The annual premiums would pretty much match what we routinely spend on dental care.

I work full time. You may be confusing my regular job with the per diem work I do, but my insurance is from my full time job.

I think colonoscopies are free with your health plan and considered preventative care?

Yes and no. The colonoscopy itself is covered IF it is billed as a screening. However, that doesn't mean all related charges will be covered. There could be a facility fee or a charge for anesthesia.\

If anything is found on the colonscopy like a polyp or the doctor performs any biopsies, the additional testing is not part of the preventative coverage and the entire test could be coded as diagnostic rather than screening and not be covered at all. There's no way to know until it actually gets done.

[feh]

If anything is found on the colonscopy like a polyp or the doctor performs any biopsies, the additional testing is not part of the preventative coverage and the entire test could be coded as diagnostic rather than screening and not be covered at all. There's no way to know until it actually gets done.

If a facility tried to pull this with me, I'd refuse to pay. That would indicate to me that the insurance company is simply trying to weasel out of their responsibility.

FWiW - my wife and I both had our "you're 50 now" screenings this year, and we weren't billed a dime for either one (that includes a couple polyps being removed and tested).

[disneysteve]

FWiW - my wife and I both had our "you're 50 now" screenings this year, and we weren't billed a dime for either one (that includes a couple polyps being removed and tested).

That's good to hear. Hopefully that's the norm. I've heard some stories that have suggested otherwise. I do know one very important factor is how the doctor bills the procedure. It has to be billed as a screening test, not a diagnostic test.

From the American Cancer Society:

The Affordable Care Act requires health plans that started on or after September 23, 2010 to cover colorectal cancer screening tests.

Although many private insurance plans cover the costs for colonoscopy as a screening test, you still might be charged for some services. Review your health insurance plan for specific details, including if your doctor is on your insurance company’s list of “in-network” providers. If the doctor is not in the plan’s network, you may have to pay more out-of-pocket.

Colonoscopies that are done to evaluate specific problems, such as belly (abdominal) pain, intestinal bleeding, or low red blood cell counts (anemia), are usually classified as diagnostic – and not screening – procedures. If that’s the case, you may have to pay any required deductible and co-pay. The same is true if colonoscopy is done after a positive stool test (such as the gFOBT or FIT) or an abnormal double-contrast barium enema or CT colonography. Some insurance plans also consider a colonoscopy diagnostic if something is found (like a polyp) during the procedure that needs to be removed or biopsied.

[scfr]

We were early adopters of the HSA/HDHP option. We no longer have a HDHP but still have funds in our HSA.

The downside I've experienced is that our HSA has changed hands 3 times. After the last change, we decided to make a 4th change ourselves because the institution that took over our HSA charges a monthly fee. I'm right now finishing up the paperwork to get our HSA rolled over.

It's a very minor inconvenience in my mind but does involve a bit of extra research (to choose the new HSA provider), paperwork, and record keeping.

It's been worth it for us, but I know there are some people out there that really dislike dealing with change, research, and paperwork.

[disneysteve]

It's been worth it for us, but I know there are some people out there that really dislike dealing with change, research, and paperwork.

I just went with the account set up by the insurance company. I didn't do any research regarding where to set up the account. I figure the money won't be in there long enough to matter as our annual medical bills exceed the annual contribution limit. So the HSA is basically just a place to park the funds until we spend them. The money isn't going to accumulate over time.