Health Insurance/HSA Question

Discussion in 'After Hours Lounge (Off Topic)' started by SethH, Jul 2, 2006.

  1. SethH

    SethH Cinematographer

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    I just got out of school and my wife and I recently received our benefits enrollment packets from our employers. This is my first time having options to choose from for health insurance.

    Right now I'm really leaning toward a high deductible option and setting up an HSA. My main reasoning for this is that my wife and I are pretty conservative spenders and already have a small emergency fund of about $1000 (which should grow considerably over the next few months). My problem is that my employer does not offer an HSA, so I will have to set that up privately.

    Has anyone done this? I've found a few places online that I could set one up, but I'm not sure how reputable they are. I'd love to hear any experiences anyone has with these plans or any advice anyone may be willing to give. Also, some of these offer the option to invest in mutual funds with the money in the HSA, while others simply pay a set interest rate -- most I've seen are around 2.5% which is reasonable. Do any of you think it would be wise to invest these funds into mutual funds? I've usually heard that you shouldn't invest money that you plan to use in 3 years or less.

    Also, I know this is obvious on this forum, but please keep any politics out of this conversation.
     
  2. Joseph Bolus

    Joseph Bolus Cinematographer

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    The nice thing about HSA is that it's tax deductible and it's employer-independent. And after the age of 65 the money in the account can be withdrawn without a tax penalty. The down side is that you (and your family) pay the first $5000/per year in medical expenses out of your HSA before medical coverage kicks in. (You gamble that your family can build up the money in your joint HSA faster than you'll need it.)

    Here's a pretty good article on the advantages and disadvantages of HSA which was published in today's Mobile Press-Register:

    http://www.al.com/news/mobileregiste...720.xml&coll=3
     
  3. SethH

    SethH Cinematographer

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    Actually, the two high deductible plans I have to choose from have a $3000 and $4000 family deductible respectively. Still expensive, but the next cheapest plan I can choose is a PPO which would cost $1600 more in premium per year than the high deductible option. So, if I stay under $1600 in expenses then I come out much better with the high deductible option. And that doesn't even consider the fact the the HSA would be tax deductible nor the fact that the PPO also has a deductible, of $600 I think.
     
  4. ChrisMatson

    ChrisMatson Cinematographer

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    If you are young, healthy and wealthy, the HSAs can make good economic sense.

    If you have any sort of chronic disease (diabetes, cancer, kidney failure, certain infectious diseases, etc...) or need to use the health care system frequently, then HSAs are not for you.
     

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