Health Savings Account - Ever heard of it?

[land_shark3]

Pros... Cons... Anyone know anything about this new Health Savings Account (HSA) set up by the Health Care Act of 2006? Apparently "the President is expected to sign the legislation into law." Either way, my company is dumping our current health insurance carrier and going with this new plan.

Is anyone else on it? What have you heard? Good, bad, indifferent? All I know is what is here on the flier and what I was told at the sales pitch this morning.

[Indiana Jolly Mon]

It is my understanding that the accounts are used so you can pay out of pocket costs your insurance doenst pay with pre tax dollars. which is a good deal, but im not sure of all the specifics. Definately look into it because it will save you money.

[pbans]

It is my understanding that the accounts are used so you can pay out of pocket costs your insurance doenst pay with pre tax dollars. which is a good deal, but im not sure of all the specifics. Definately look into it because it will save you money.

is it different than a flex plan or cafeteria plan that is already in place???

[ToplessRideFL]

Its not an insurance plan. Why would your company be dumping the insurance coverage?

[krusin1]

I've studied this some, and it sounds pretty good to me.

If I get the concept....

You buy (or your company buys for you) what is essentially a high-deductible health insurance policy. To help cover the deductible, you get an HSA. In a lot of cases, the employer will put money in the HSA on your behalf as part of your insurance package. If you need to pay for health care, you can use the $$. If not, the money keeps accumulating (how much and how fast depends on your specific situation.)

The beauty is that the $$ in the HSA are all yours, stack up from year to year, and go with you wherever you go.

Theoretically, if you start young, you can accumulate a pretty decent amount in the HSA by staying healthy, and then use it when you get older.

You can use the $$ to pay for health care, prescriptions, etc., but you CAN'T use it to pay for the actual health insurance.

Seems to reward those who stay healthy while not necessarily penalizing for sickness. PLUS, it seems like it'd help prepare for your future needs.

Unless I've missed something, I like the concept.

Anybody else got info on HSA's?

[blackjacks wife]

We have one and it works just like a debit card.

We deposit pre-tax dollars from our paycheck into an account and each time we are at the doctors, dentist, ER or the pharmacy we pay with this "Benny Card". We have (knock on wood) very healthy kids and put a minimal amount in the account last year and it worked out very well for us.

The only draw back is that if you don't use the money that is in the account before a specified date (for us it is 3/31/07 for last years deposits) you loose the money.

[Big Red Parrothead]

Health savings accounts are not the same thing as flexible spending accounts, with which most of us are familiar.

Krusin1 pretty much has it right. It's a little more complicated than this, but here's the short version:

HSAs are a somewhat new alternative to traditional insurance. Basically, you invest money (tax-free) in this plan that can be used to pay your deductible for a high-deductible insurance plan (sometimes called a catastrophic care plan). These type of plans generally don't cover the first several thousand dollars per year of medical care (your deductible).

So what the HSA does lets you take out tax-free money and then use that to cover your insurance deductibles.

There are benefits to the employers because high-deductible plans are much cheaper to offer than traditional insurance plans. There can also be a benefit if you are young and relatively healthy. Unlike traditional flex spending accounts, you can roll over the money you've invested from year to year. So if you don't get sick and have to use the money to pay the high deductible, the money can really accumulate.

The biggest downside is that, because the high deductible plans generally don't cover anything until you've paid a certain amount, you are out of pocket for most expenses. So let's say you need some kind of screening test (a mammogram or colonoscopy for example). Some high-deductible plans cover such things but, if not, you are responsible for paying the thousands of dollars that may cost out of your HSA until you have met your annual deductible. So if you get sick or need costly services, your HSA will not really build up a significant amount.

Businesses like them because they are cheaper than traditional health plans. Insurance companies like them because, when individual patients are footing the bill, they are more likely to choose cheaper procedures and drugs. Most consumer and public health groups don't like them because it really only benefits younger consumers and because many patients will skip medications or forego preventative care because of the costs.

[krusin1]

We have one and it works just like a debit card.

We deposit pre-tax dollars from our paycheck into an account and each time we are at the doctors, dentist, ER or the pharmacy we pay with this "Benny Card". We have (knock on wood) very healthy kids and put a minimal amount in the account last year and it worked out very well for us.

The only draw back is that if you don't use the money that is in the account before a specified date (for us it is 3/31/07 for last years deposits) you loose the money.

Actually HSA's are different - you don't lose the money if you don't use it. It continues to stack up and goes with you even if you change jobs.

[land_shark3]

I'm sort of up in the air about how I feel. On one hand, it looks like it would save money AFTER you hit your deductible. The downside for me (employee plus 1) is that my deductible ($4k) is the same as a family with infinite children and they only pay $50 more per month. It seems like this might be a good deal for single people or people with children.

As someone mentioned, there is supposedly 100% insurance coverage once you hit your deductible. No co-pays or anything like that. In this case United Healthcare will be picking up the tab.

[comtnfish]

If you're more or less self-employed, or your employer doesn't cover health care or benefit program at all, where can you get a HSA? Anyone have reports, good or bad, about companies who offer them to individuals? (I have an individual health plan with a high deductible, but it also covers 100% once the deductable is met.)

[buffettbride]

It seems like this might be a good deal for single people or people with children.

Perhaps yes and perhaps no. It doesn't penalize by making you pay more for having children, but you aren't rewarded for not having children, which is seemingly the case for standard family insurance plans which the more people on your plan, the more you pay.

however, by insuring a family versus only yourself, the risk is much higher that one of those pricey procedures would be needed. i mean heck, in the last year i've paid for a broken finger, a broken wrist, an almost-broken ankle, and none of those expenses were me. i've been to the doctor personally, 5 times in the last year, for routine well checks or minor illnesses, only warranting the insurance co-pay, some lab work, and some prescriptions.

[ToplessRideFL]

As someone mentioned, there is supposedly 100% insurance coverage once you hit your deductible. No co-pays or anything like that. In this case United Healthcare will be picking up the tab.

I would be concerned that people would chose not to go to the doctor when they needed to because it would cost them upwards of $100 plus Rx costs....

With a traditional insurance plan there is an affordable co pay for such needs.

I dont think most people are diciplined enough to save or want to spend $$$ for heath emergencies.

It cost me $840 in insurance premiums in 2006. My employer picked up however much......

One mammo and GYN appointment and 1 physical for each of us... and the cost would have been about the same. Should anything serious have happened...... the cost would be outrageous.

I dunno... they are gonna have to sell me pretty hard to let go of insurance @ aged 40 something....

[buffettbride]

[

I dunno... they are gonna have to sell me pretty hard to let go of insurance @ aged 40 something....

I agree. I like the idea in theory, and I have no problem paying seemingly out of pocket (yet pre-tax) for a longer amount of time. My doctor gives a discount to self-pay patients. But, I would be worried about those big things like the mamograms or a *gasp* pregnancy, or if someone needed surgery. It entirely depends on what is considered a life-changing kind of procedure and where it falls regarding coverage.

[blackjacks wife]

We have one and it works just like a debit card.

We deposit pre-tax dollars from our paycheck into an account and each time we are at the doctors, dentist, ER or the pharmacy we pay with this "Benny Card". We have (knock on wood) very healthy kids and put a minimal amount in the account last year and it worked out very well for us.

The only draw back is that if you don't use the money that is in the account before a specified date (for us it is 3/31/07 for last years deposits) you loose the money.

Actually HSA's are different - you don't lose the money if you don't use it. It continues to stack up and goes with you even if you change jobs.

Alrightythen. In that case I know nothing about HSA's and I'll butt out....

[land_shark3]

It doesn't penalize by making you pay more for having children, but you aren't rewarded for not having children, which is seemingly the case for standard family insurance plans which the more people on your plan, the more you pay.

Which is exactly why in my case (employee +1) I do get penalized.

Payment for 1 = $75
Payment for 2 = $150
Payment for 3+ = $200

If I had 15 kids, it would only cost $50 TOTAL to insure them as opposed to the additional $75 EACH it costs to cover my wife and me.

Deductible for 1 = $2000
Deductible for 2 = $4000
Deductible for 3+ = $4000

Having kids, you are more likely to hit your deductible than someone who is married with no kids. Right now, it averages to $2k per person deductible. If I had 2 kids, my average deductible would drop to $1k per person; 6 kids and I'm down to $500. This plan is set up to benefit large families.

One mammo and GYN appointment and 1 physical for each of us... and the cost would have been about the same. Should anything serious have happened...... the cost would be outrageous.

Apparently under this new deal you get one annual doctor's visit completely free, but it does not count towards your deductible. As bad as this is, I haven't had a physical in almost 10 years. My doctor's visits are limited to the annual sinus infection in the Spring and maybe a cold in the Fall. However two years ago when I broke my foot, I paid the $100 rate for the Dr and X-ray and my insurance picked up the other $800. Under this plan, I'm stuck paying $900 until I hit $4k.

[buffettbride]

Ahhh. I didn't quite catch the deductable amounts. Who on earth has 6 kids???

My insurance used to be very good, but now is kinda crappy. We have a family deductable of $700, $25 copay, and most services are covered at 80/20 or 90/10. When I first started working for this company, employee coverage was free except the copay and family coverage was a minimal addition. Copays were reasonable, prescription costs were fixed, and plans with a deductable were unheard of.

[Big Red Parrothead]

If you're more or less self-employed, or your employer doesn't cover health care or benefit program at all, where can you get a HSA? Anyone have reports, good or bad, about companies who offer them to individuals? (I have an individual health plan with a high deductible, but it also covers 100% once the deductable is met.)

Several banks, credit unions, insurance companies, etc. offer them. You can go to http://www.hsainsider.com/ and put in your zip code to find some in your area.

As far as reviews of individual plans, that I can't help you with.

[SharkOnLand]

Ahhh. I didn't quite catch the deductable amounts. Who on earth has 6 kids???

Mormons? (kidding, people)

[phjrsaunt]

Health savings accounts are not the same thing as flexible spending accounts, with which most of us are familiar.

Krusin1 pretty much has it right. It's a little more complicated than this, but here's the short version:

HSAs are a somewhat new alternative to traditional insurance. Basically, you invest money (tax-free) in this plan that can be used to pay your deductible for a high-deductible insurance plan (sometimes called a catastrophic care plan). These type of plans generally don't cover the first several thousand dollars per year of medical care (your deductible).

So what the HSA does lets you take out tax-free money and then use that to cover your insurance deductibles.

There are benefits to the employers because high-deductible plans are much cheaper to offer than traditional insurance plans. There can also be a benefit if you are young and relatively healthy. Unlike traditional flex spending accounts, you can roll over the money you've invested from year to year. So if you don't get sick and have to use the money to pay the high deductible, the money can really accumulate.

The biggest downside is that, because the high deductible plans generally don't cover anything until you've paid a certain amount, you are out of pocket for most expenses. So let's say you need some kind of screening test (a mammogram or colonoscopy for example). Some high-deductible plans cover such things but, if not, you are responsible for paying the thousands of dollars that may cost out of your HSA until you have met your annual deductible. So if you get sick or need costly services, your HSA will not really build up a significant amount.

Businesses like them because they are cheaper than traditional health plans. Insurance companies like them because, when individual patients are footing the bill, they are more likely to choose cheaper procedures and drugs. Most consumer and public health groups don't like them because it really only benefits younger consumers and because many patients will skip medications or forego preventative care because of the costs.

That's a terrific desription. If you have more questions, I'd be glad to help as much as I can (I work in Human Resources/Benefits for a large company).

[land_shark3]

That's a terrific desription. If you have more questions, I'd be glad to help as much as I can (I work in Human Resources/Benefits for a large company).

Adding you to the PM Rolodex.