Are HSA high deductible insurance plans helpful, or just a way for your employer to save money on premiums? Do you have to contribute to the HSA, or does your employer fund it?
Do you know someone with diabetes or something similar, that it is a benefit to?
HSAs are employee funded. They are transportable so you would still have the funds you paid into it if you left your place of employment. They are almost like a bank account for medical costs where you should be issued a check book or debit card to access the funds. There will be an individual deductible and/or a family deductible to be met.
I have an HCA, on mine my employer deposited $1000 on 01/01/2009, my deductibles come out of that $1000.
After that I have a $1000 out of pocket maximum for the year, my deductibles do not go towards that. Then I will have coverage at 100% of the allowed amount. All members on the policy use that same first $1000, then each are subject to the $1000 out of pocket max.
My HCA works out cheaper for me than my previous PPO plan, taking into account the monthly premium difference and what my copays were on the PPO plan. HCAs are not transportable if you change jobs, but any funds left over in the deductible may roll over into the next year.
Well there are some problems for HSA’s and folks with chronic illness. It is very difficult for HSA’s to sustain a chronic disease, for a long period of time and the reason is that people with chronic disease can sledom over time save enough dollars to offset the incredible costs that are lurking. They do work great for relatively well people. unfortunately over time regular insurance is usually a better option, becuase it spreads the group risk over the group. With an HSA, you are spreading the risk over an individual, jsut an obervaiton.
rick phillips
Having a cap on your health care costs can benefit you and your family if you have alot of medical expenses each year. I have a 4,000 deductible however employer contributes $2600 into HSA, meaning $1400 max out of pocket for RX and medical. Also premiums are set up considerably less than PPO plan.
You should also be able to set up a pretax deduction to contribute the difference to your HSA in addition to employer contributions. You have to be careful you do not go over the IRS maximums and if you or your dependent are on medicare, the high deductible plan will not work.
I would be curious what type of co-pays do you make for diabete supplies along with yearly appointments for comparison.
Tony makes a great point, if your insurance has a cap on OOP expesnes, a HSA is far more manageable. However, what sometimes happens is that the employer contribution is fixed and the cap is moving. I have seen these plans with as little as $1,500 and a mximum expense of $10,000 but withno payment until one reaches the $10,000 mark. It all depends on how things are set up.
rick phillips
HSA’s do have a significant cost savings on the insurance side. The high deductible plans allow the insurance companies to charge a little lower premium knowing that for the amount to reach your deductible they will not have any liability for. Of course most of these will give you an annual physical as part of your coverage, and normally will give you a female exam as well.
As far as funding the HSA itself, some companies contribute to them for their employees, some do not. My wife’s does not, but the contributions that we make are still deductible from our income tax returns. The biggest advantage to the HSA’s over the older plans, MSA’s, is that with the MSA’s you had to use the money or lose it each year. The HSA’s can build up and carryover indefinitely. So, if you put $100 per month into an HSA, but over the course of the year you only actually use $500, the remaining $700 is building up tax free, or at worst tax deferred. As long as the money that you take out is used to pay medical bills it is tax free. If you use it for anything else, of course, you will have to pay tax on it.
For 2009 the HSA limits are: single coverage $3,000, family coverage $5,950. Don’t ask me why they discriminate on families by $50, doesn’t make sense to me. Your insurance agent or HR department at work can verify that your plan qualifies as a high deductible plan or not. Just because it has a high deductible does not always mean that it is a qualified high deductible plan. A few other rules that it has to follow.
As far as the benefit of the HSA, I can pay for my diabetes supplies, prescriptions, doctors visits, etc from the plan. I don’t pay them all from the plan, but I do some. I can also pay for items my insurance doesn’t cover, eyeglasses, dental, etc. Plus you can buy certain over-the-counter medications and supplies that qualify under these plans.
Hope this helps. Any other questions, don’t be afraid to ask.
Going by the differences in the answers, I’d say HSAs vary from carrier to carrier at least for the funding and deductibles.
My employer is changing to an HSA that has a $5000 MOOP per year - and they are contributing $500 per quarter for the first year… That’s a drop in the ocean - and I have NO idea how I’m going to be able to afford to properly treat my conditions (heart/diabetes)… We have our meeting in six hours - and I have a LOT of questions for the plan administrators as well as the person that is coming there from BCBSFL.