Health Savings Accounts

**frugalfriend** · 02-10-2010, 07:27 PM

I am considering starting an HSA (Health Savings Account) for myself. I talked to an agent today and am trying to sort through everything he said over the phone and has emailed me and see if it is a good move. Dh has a pre-existing condition so unfortunately he is ineligible. The agent did say that dh would be able to use the $ in the account though, for his healthcare, or any family member. Anyone have one and can tell how it is working for you? Pros? Cons? Dave Ramsey recommends them so that is why I posted this here, for lack of a better place.

Calling Greebo! Would like your opinion on these, if you don't mind! Thanks!!!

**ladytoysdream** · 02-10-2010, 07:34 PM

We have one. It was set up through my husband's employer to help them save on health insurance costs. What we don't use is rolled over to the next year. Our has a checkbook and a debit card attached to it. Normally I use the debit card. Had it 2 years now, just starting the 3rd. Works fine.

**joyofsix** · 02-10-2010, 08:58 PM

Dh and I have considered this but he changed jobs and their insurance is much better than what we had. I'll be interested in hearing what others say.

**Greebo** · 02-11-2010, 08:13 AM

If you have a high deductible. HSA's are a great way to set money aside pre-tax for health coverage. In addition, once you have a certain amount set aside, you can invest the money, turning it into a future medical self insurance plan.

Our deductible is $2,400 each, and we put $2,400 a year into our HSA. We figure that's enough for now because we're both in pretty good health.

**sabrelvssammy** · 02-11-2010, 09:32 AM

we have a $10,000 'catastophe policy' so we use the HSA to sock away as much as allowed by law

(2009 & currently 2010 is $5950 that is allowed to be invested each calendar year)...

in the past year i was using our local bank as the 'adminstrator' (unfortunately co's like this give 'paltry' returns in low-bearing savings accts...) but stumbled upon a company called 'Health Savings Administrators'....they allow you to invest in the market so we switched to them about 6 months ago and picked a vanugard 'indexed' fund to invest in...

we fund this account to the max and then do not touch it...allowing it to grow each year...this is tax-free money (to be used of course for medical expenses) but we are not nickle-diming this account and are still paying for all needs out of pocket each year....we have run the numbers, done the math...and allowing this to grow (think like an IRA) we plan on using ours for our future medical when we are needing supplemental polices and falling into that dreaded 'donut hole' in our 'old age'....

this is another great 'tax-savings' vehicle that your yearly contribution is treated as a reduction in your wage bottom line..(just like the IRA, 401k, etc...) so if you max those out and you qualify for the HSA you should definately jump on the wagon...

and then if possible, let the thing grow and grow......but if needed ours is accessible...send in the bills...they cut you a check....(i don't know if a debit card is offered coz i didn't ask for one...they gave us one when we were with the bank) but we intend to not touch this for many yrs to come....

**Contrary Housewife** · 02-11-2010, 10:13 AM

HSAs are great in that they allow you to set aside funds pre-tax for medical expenses. If you know about how much you spend out of pocket on prescriptions and doctor visits each year it can be a real savings. DH should be "covered" by this as there are no restrictions on it for pre-existing conditions, it is just a savings plan not health coverage.

Read the fine print carefully. Some HSAs expire at the end of the year and it is "use it or lose it". In fact, over the years we have never been in one where we could roll over the money or keep it for investments.

If it is getting to be late in the year and you still have funds available and you think you will not use it all up you can usually stop contributing to the plan (it comes out of your paycheck each week) so that you don't end up throwing money away.

**Greebo** · 02-11-2010, 10:33 AM

Originally Posted by Contrary Housewife

Read the fine print carefully. Some HSAs expire at the end of the year and it is "use it or lose it". In fact, over the years we have never been in one where we could roll over the money or keep it for investments.

No - those are not HSAs. Those might be FSAs which do expire at the end of the year.

HSAs are rollover or they aren't HSAs.

**frugalfriend** · 02-12-2010, 10:20 AM

Thanks for all the input everyone, helps a lot!

Originally Posted by Contrary Housewife

DH should be "covered" by this as there are no restrictions on it for pre-existing conditions, it is just a savings plan not health coverage.

That is exactly what I thought and the reason I was looking into HSA's in the first place! But, the insurance agent/ELP (Dave's endorsed local provider) told me that pre-existing conditions are NOT covered.

I think it may be the state of Colorado that is different? Maybe I need to talk to someone else and just the companies he represents don't cover them??? hmmm I still have more reading/researching to do. Dh is self employed so we have very few options.

**Josephhgoins** · 02-12-2010, 10:27 AM

We have a Flex Card (visa) that I think is something like what you are talking. It does expire at the end of the year. The dollars we put into it are Pre-Tax, which is an added benefit. It pays no interest.

Its still awefully handy. Ours has limits on what you can buy, but they are very few. Namely, you can only buy things to get you healthy not keep you healthy.

I didn't get one this year and haven't really missed it. I might check into something like you guys are talking about.

Thanks,