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Health Savings Accounts and HDHP's.
3lwap0
Registered User regular
Registered User regular
Oh boy, lucky me. As of 2013, my company will only offer HSA style health plans.
Thanks to lousy fucking luck, I drew poorly in the genetic lottery - so I have to see a few physicians, regularly, about some medical issues. This plan switch has me sweating bullets - I've reviewed all the documentation my company has sent, and I'm fairly unhappy with the massive increase in my out of pocket expenses. It's also my understanding a lot of companies are switching to this method of 'health insurance'.
So my question to H&A is this: Does anyone have any personal experience with HSA's? Does anyone have any stories or advice for the transition, if they've done the same? How about physician's - they can't really like this system much, and I'm not crazy about losing any of my health providers.
tl;dr - HSA's: Any pitfalls I need to watch out for? This is really new territory for me.
Thanks to lousy fucking luck, I drew poorly in the genetic lottery - so I have to see a few physicians, regularly, about some medical issues. This plan switch has me sweating bullets - I've reviewed all the documentation my company has sent, and I'm fairly unhappy with the massive increase in my out of pocket expenses. It's also my understanding a lot of companies are switching to this method of 'health insurance'.
So my question to H&A is this: Does anyone have any personal experience with HSA's? Does anyone have any stories or advice for the transition, if they've done the same? How about physician's - they can't really like this system much, and I'm not crazy about losing any of my health providers.
tl;dr - HSA's: Any pitfalls I need to watch out for? This is really new territory for me.
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If you're a sickie, these plans suck donkey balls. But all you can really do is max out your contribution and look for a job with better coverage.
HSA+HDHPs are usually worse for people with chronic conditions and better for people with low medical expenditures.
The best advice I can give you is to keep a file with all of your medical payment paperwork. Keep copies of any deposit slips or paystubs showing money going into the HSA. Keep copies of all of your medical bills. Keep copies of any receipts showing HSA purchases at pharmacies.
You might not need it all, but it's better to have documentation that you don't need than to lose something and find out later that you needed it.
One quick question for you: is your employer going to contribute any money to your HSA?
the "no true scotch man" fallacy.
However HSA's are shitty and wildly overrated if you actually have to use your insurance for anything serious, like a test or operation, because the deductibles are almost always thousands of dollars high.
The pitfall is: it's an HSA and HSA's are horrible for anything but the most ideal situation
we also talk about other random shit and clown upon each other
1) Is your employer contributing any money to your HSA?
2) How much money can you comfortably save per month?
3) Are you single, or do you have a spouse or family on your plan?
I'll post some numbers based on the answers to those questions.
the "no true scotch man" fallacy.
Your first primary care physician visit per year is free thanks to Obamacare.
But yeah, after that first visit, you're (usually) on your own until you hit your deductible.
the "no true scotch man" fallacy.
Oh neat, that explains why they want me to come in ever 6 months now instead of every year.
so I would check just to make sure
For example my health plan (not an HSA), has a deductible, but any office visit I make is $30, period. No matter if I am at the deductible or not
so... I'm not expecting your HSA to be like that, since HSAs are designed to be cheap and worthless, but you might as well check
I had an HSA at my first job and yeah, I was paying $150+ for basic doctor visits
we also talk about other random shit and clown upon each other
1) Yep. A scant $600 for 2013.
2) I have no idea. I'm actually shopping for a house right now, so I can put back a good bit. The downside is my bills go up once I own. That's a tough thing to gauge.
3) I'm single.
Some other info. Ocular hyper-tension (Glaucoma), and one other deliberately unnamed condition are all the chronic conditions I have (or that I know of). My company is also going to let me put 40 hours of PTO into my account - that'll be..a decent chunk of cash, but it won't max out my annual contribution. Also, it fucks me out of 40 hours of vacation. Sigh.
If I deplete my HSA, am I boned? Or does my insurance company actually do what the fuck they're supposed to do? Trying to calculate how fucked I am is sending my blood pressure up. I doubt I can afford that now.
Fellows like me can write a check in full for the amount because I've got 1/5 my salary in it because I never get sick. But I forsee the first for you since you have preexisting condition. Let them know you can afford X a month (less than gets put in).
Plus find out if they're depositing money for you because that changes things considerably if they're dropping $100 a month in for you.
Okay, here's what it boils down to.
You want to make sure that, at minimum, your HSA receives enough deposits to cover your deductible. I should have asked you how much your deductible is, but it doesn't matter too much for this conversation. If your deductible is $1800, and your employer is contributing $600, then you want to make sure you get at least $1200 of your own money into the HSA during the year.
Your insurance company gives no shits whether you deplete your HSA or not. You are still on the hook for the deductible whether you have a billion dollars in your HSA or zero dollars in your HSA. That's why you want your HSA to cover your deductible at minimum.
An HSA may have any amount of money in it, but only the first $3100 per year is tax-deductible. It is a very good idea to try to contribute that amount of money over the course of the year. So if you can put $258.33 in your HSA per month, you are doing good.
Your maximum out-of-pocket expense, by law, is $6250. Can you afford $6250 in medical payments over the course of a year? If you're like most people... probably not. But that gives you an idea of how deep this hole goes. If you have a nest egg or enough cash on hand, try to get $6250 in your HSA and leave it there. That way you have a cushion for any possible medical expenses.
Figure out how much you want to contribute to your HSA from your own personal funds, and try to get that set up as a payroll deduction through your employer's payroll department. This will make things a lot easier for you come tax time.
Finally, you want to leverage the tax deduction as much as possible. So any time you have a predictable medical expense, put the money for it in your HSA first and then use your HSA to pay the bill.
the "no true scotch man" fallacy.
1) Minimum contribution to your HSA = your deductible
2) Better contribution to your HSA = $3100/yr
3) Best contribution to your HSA = top it out to $6250
4) Try to get these contributions deposited straight from your paycheck if you can set that up
5) Any time you have a medical bill you're about to pay, get the money into your HSA first and then pay the bill from your HSA
6) Keep copies of all deposits and receipts and bills in a folder in a safe place
the "no true scotch man" fallacy.
Thank you for the sage advice @Feral (and *brofist* to everyone else!).
It really sounds like..well...this sucks. Hard. I didn't know what or much to make of it when I started to read up on it. At least I know how much of the shaft I'm getting now.
So here are more plan details I just found:
(In Network)
Your Annual Deductible:$1500
Your Annual OOP Max: $2,300
Coinsurance—the % You Pay After the Deductible: 10%
What You Pay after deductible for Retail and Mail Order Prescriptions (generic, formulary, non-formulary): Retail-10%, Mail-10%, Retail 90 day 30%
So, once my company chips in $600, and I shift my PTO (shudder) into the HSA, i'll meet my annual deductible and a little extra. Let's say I exhaust that in a year. What happens? I start paying 10%, until the year changes, and then I hopefully have the deductible back in it? Or is it really $6250, even after I meet my deductible?
So, based on your plan, the most amount out of pocket that you would have to pay each year is $3800.
The Best in Terms of Pants on JCCC3
And really, insurance is there in case of major problems. The HSA basically means if you spend in the mid-range (above your company contribution but below your cutoff) you're spending more, but after that it's essentially the same as a PPO. My wife had to go to the hospital for over a week and we had a bill of over $100,000, ended up paying the $3800 that is our out of pocket maximum and the rest of the year everything was covered as well.
One note - if I read Feral's note above correctly, it sounds like he says you need to put money into the HSA first before using it on qualified expenses. In my case at least, I have had no issues paying using my own checking account if there isn't enough in the HSA at that time, and then reimbursing myself later out of the HSA. When I do this, my HSA holder asks for information like the claim #, etc. that it's tied to so I have that ready in case the IRS comes knocking.
You're starting out with your deductible in your HSA, which is actually a decent place to be.
Try to squirrel away a little money each month into that HSA to hit that $3100/yr tax-free contribution cap. So if you start out with $600 in employer contribution and $1000 of PTO in your HSA, that's $1600. That leaves $1500 before you hit the tax-free contribution cap. Try to get $125 a month into that HSA; this gets you the best possible tax benefit and covers your deductible for next year.
Yes, you can do this. My advice for putting money into the HSA before spending it is just to make accounting and tax time easier. You don't have to do it my way.
the "no true scotch man" fallacy.
yeah but there are some cases
1) Where people don't have $1,000
2) Where those kinds of facilities don't do bill-me-later
I had to pay up front for a test a couple of months ago. It was only $45 because I have upper-god-tier insurance
if I had an HSA that should would have been $500+ easily, and I'd be shafted
"pre-tax" is massively overrated in terms of mitigating out of pocket expenses... which is the entire point of health insurance
HSAs only function under ideal conditions. That they prevent you from total financial ruin in the event of surgery isn't exactly a selling point. The huge majority of plans do that.
Every employer tries to convince their employees that HSAs are awesome because it saves them tons of cash. They aren't. They are shit. And they are most shitty for the people who most need insurance.
we also talk about other random shit and clown upon each other
I actually hope Obamacare comes to the rescue. These mythical health exchanges may have a more appealing solution than kicking me in the balls with an HDHP. I realize that's a long shot, but shit's gettin' real up in this joint.
And thanks for the help everyone. I
I don't think HSAs are amazing or anything, but I've had one for years now and it's worked out better than I expected. For reference, I have a son and wife, and we had my son while being on the HSA. My son needed some therapies because of issues caused by prematurity, and my wife has had some health difficulties the past couple years. My company contributes $1200 for the family plan, and I kick in an extra $100 a pay period.
I've also been able to use the HSA to pay for Dental work, which can save some good cash if you're dropping several hundred bucks on it.
In my opinion, the point of insurance isn't to mitigate OOP, it's to mitigate disaster, like any other kind of insurance, but that's a different discussion.
The general point that HSAs suck is that it's being substituted for traditional health insurance further down the wage ladder. Edit: and those further down the wage ladder can less afford unexpected OOP expenses.
Edit: Yeah, sorry if this was OT.
the "no true scotch man" fallacy.
OP, if you really wanna do the math your best bet is to call your insurance company and have them send you a copy of all your Explanation of benefits for 2011-2012.
That will provide you with the contracted cost for services provided and give you an idea of the minimum necc to fully fund your HSA and will help you budget.
You may also have to contact your Pharm benefit provider to get your prescription EOBs, but I am not sure about that, go to your insurance first and find out.
Take something like endoscopy for example. You have to find out how much it costs for the center doing it, the anesthesiologist, the person(s) reading the results, the doctor performing the endoscopy, etc. and account for the costs of all of them. Finding this out before the actual procedure is much more difficult than it really should be, but it can be done.
Nothing about the HSA makes me feel comfortable - but it's the hand I'm being dealt, so I just have to roll with the punches.
I have to verify, but I believe an explanation of benefits packet will be hitting my doorstop in November just prior to enrollment- I think as @Deebaser has mentioned, it's calculating how much to contribute into the plan that it's optimal for me and my tax bracket. That's where I scratch my head, and wonder how I can figure that part out. I may just need to reach out to my HR department - or wait on that magical packet of information to arrive.
@Ganluan - thanks for that advice - and it's something I'll absolutely need to know prior too. Thanks for that.
I think all the outstanding medical issues I've wanted to get looked at I should jump on now before this new plan goes into effect - before that gravy train derails.
I know...it's confusing.
When you go to the doctor, your insurer is required to send you a notice that a service was performed on your behalf and it lists the physician, the service, your copay, the billed amount, and the amount that insurance actually paid. You need to get all of those and add up your copays + the amount that insurance actually paid.
That will provide you with a pretty good estimate of how much you need to put in your HSA to cover your utilization, which will be hella accurate if the carrier isn't changing
edit: Not disagreeing with anything that is written above or passing judgement on these types of plans. Just saying there are a few benefits.
edit2: But yes, it is mostly only good for young adults who don't ever need to see the doctor. It is definitely a way for a company to fuck you over and steal benefits from you without you really noticing.
Oh yeah, I see it now. Yep. It's not really a gain for most people but for young, healthy people it can be.
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