HSA Insurance

My 13 year old son is type 1 and uses a pump and the usual prescriptions for insulin and strips. Our insurance company is added a hsa medical plan. It seems confusing. Does anybody with our medical needs use one? The company contributes $5000. Are these good or bad for diabetic families? Thanks.

These are qualified high deductible plans. The definition of high deductible, though, is pretty lenient. As long as the plan has an individual deductible of $1,150, or a family deductible of $2,300 it CAN qualify as a HDHP. Not all that have these limits will meet the requirements, but if they have at least that big of a deductible they can meet them. If they meet the requirements, I would think that the company contribution of $5,000 is VERY good. The amount put into the HSA can be spent for virtually any health related cost TAX FREE. No income from the company putting the money into the HSA, no income from taking money out of the HSA as long as it is used for qualified medical expenses. That can be doctors office visits, prescriptions (including strips, pump supplies, etc.), eyeglasses, dental visits, and even most over the counter medicines such as tylenol, Zyrtec, etc.

The biggest advantage to the HSA though, is, unlike the old MSA’s or your cafeteria plans, if your boss puts in the $5,000 and you only spend, for example, $2,500 of it this year, the remainder remains in the account and you can spend it in the future. So next year when your employer puts in another $5,000 you would have $7,500. That can keep growing and growing and growing.

Most of these plans will give you checks that you can access the account with as well as a debit card. Most of the plans will also pay you a little bit of interest which is also TAX FREE.

I am not in the insurance business, but to me this is one of the best things that congress has done for working people in a LONG time. Particularly if your company is going to be making the contribution for you. My wife and I have separate HSA’s and we really like them. Unfortunately, her employer doesn’t put the money into them for us. I do that through my business.

Anyone that makes contributions to HSA’s can deduct them on the front page of the 1040, not as an itemized deduction. That is another really nice thing for people that qualify. I am a T2, and I buy my strips, prescriptions, etc through my HSA (or my wife’s whichever one of us writes the check that month).