SO excited about HSA - just a celebratory rant

strickland8052 · October 2014

I've been looking over our new health insurance options, since open enrollment is about to open up. I just wanted to say that I am SO excited that our employer is offering a high deductible plan with an HSA this year!!!!!

In case you don't know much about Health Savings Accounts (I did not until yesterday), they are pretty much the greatest thing ever. You get to put the money in there before taxes. It then can be invested and grow tax-free. And then you get to take it out tax-free to use it on medical expenses. If you don't ever have to use it on medical expenses, then you can use it for retirement after the age of 65 (but if you do that then you have to pay income taxes on it) OR you can continue to use it tax free to pay your medicare premiums or some long term care insurance. The HSA rolls over year-to-year (not like a flexible spending account) and it can move with you if you change jobs or insurance. Amazing!!!

I'm probably going to swap over to a low deductible HMO when we start TTC in a couple of years, but until then I am going to max out this HSA like its my job. In fact, I think the HSA may just take precedence over my ROTH and baby fund (although I'll continue to contribute to those as well).

Just wanted to nerd out about this new option. I thought some of you could appreciate the excitement.

brij2006 · October 2014

You are welcome to nerd out about HSA's to me all you want. :-)

They're pretty dang awesome, honestly. Especially if you choose a high deductible insurance plan and are a relatively healthy person who won't need it unless something drastic happens. It can be used for so many different health related things too, which is awesome.

jessica490 · October 2014

Awesome, good for you!!! I've thought about this option as well, but it scares the hell out of me. H has an HSA card from his own medical insurance before he switched over to mine and it's great, because it covers any co-pays or extra dr/ fees. I'll have to think about this more.

Xstatic3333 · October 2014

That's awesome! H's job offers HSAs but not high deductible plans so we don't have one yet. Maybe once our debt is gone!

hoffse · October 2014

One other thing you can do with them is to save your receipts of medical stuff, just pay out of pocket instead of getting reimbursed from the HSA, and then withdraw that reimbursement money later tax-free when times are tough or when you retire. In other words, you can have a procedure in your 20's and be reimbursed for it in your 60's. That's one way people use them as a tax-free growth vehicle for retirement. Over your lifetime, you might have spent enough on routine medical stuff to withdraw most of that HSA money tax-free in retirement... or you will as you age.

It takes some good record-keeping, but totally possible. My HSA provider actually has an online vault where I submit receipts and then I can choose whether I want to be reimbursed right away or not. I have never chosen to be reimbursed, so I have a "credit" that's just sitting there in case I ever need it.

The thing about them that people sort of lose track of is that your insurance plan still typically covers expenses over your deductible, and that coverage does not come out of your HSA money. So if you can pay OOP up to your deductible, the HSA is just a bonus pot of money sitting there that you hopefully won't ever have to touch. My HSA deductible is like $2500/year. We keep enough cash in our e-fund to cover that, so I wouldn't have to dip into those growth funds regardless of what happens medically. If you can't afford the deductible OOP, then it makes sense to keep enough cash in the HSA to cover the deductible (and maybe a bit more) and then invest the rest.

But yeah. I'm a huge fan.

strickland8052 · October 2014

@hoffse - That is a great idea! I didn't know you could just get reimbursed later. I may make a notebook to save all my receipts or hopefully my HSA will have an online vault like yours.

cupcait927 · October 2014

I love hearing people get excited about HDHP plans and HSAs! Working for an insurance broker that deals with employer benefits, we see a lot of employers and employees that hate the sound of a HDHP plan, even with an HSA. They don't understand it and get scared. Copays are easy - you know how much you'll pay every time you go to the doctor. HDHP plans take a little more work but really, they're not that bad. They teach you how to be a better consumer and more accountable for your health and your financial future.

I love my HSA as well. I haven't been able to contribute as much as I'd like in the past but now that I'm married, we're going to bump up our contributions and try not to touch it unless we absolutely have to and pay out of pocket instead.

hoffse · October 2014

strickland8052 said:

@hoffse - That is a great idea! I didn't know you could just get reimbursed later. I may make a notebook to save all my receipts or hopefully my HSA will have an online vault like yours.

Yeah definitely give them a call and talk to them about that. You have to be able to show receipts in case the IRS ever audits you or the account.

KatieCutie05 · October 2014

its great if you don't have a lot of reoccuring medical expenses. That ended up happening the second i opened my hsa so there was nothing in there and i had a high deductible. the doc set me up on a payment plan monthly so i use all my HSA money just about as fast as it comes in so i feel like i'm just paying 350/m for just me for medical because my paycheck is tiny and i don't have any money left to show for it. But now i have my HSA contributions maxed out and 2 payment plans set up basically now with my prenatal care. Surprisingly i have 700 in my HSA right now - that must mean i owe someone more money. lol

Next year i'm just going to do an FSA so i can get a better healthplan with a lower deductible. Its still all pretax money - i just can't invest it and it doesn't carry over and aparantly i don't take advantage of either one of those anyway.

vlagrl29 · October 2014

We've had an HSA for a few years now. We use to have high deductible plans until the ACA came out. Ours is a bit different because we are self employed. I track all of our medical expenses every year and then we add it up and take that amount and deposit it into the HSA in early December. Then we transfer it back out into our checking by the end of December so we can get the tax deduction every year.

SO excited about HSA - just a celebratory rant

Re: SO excited about HSA - just a celebratory rant

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