Is a health savings account a good or bad? I'm confused?

Question

My company is switching to a high deductable hsa. I will be getting individual coverage. I'm wondering what the pros and cons are for me. I know my company will be saving a lot of money. Right now I have an 80/20 plan.

Answer 1

Well, if you use it correctly, a medical savings account can be good for you financially.

With such an account you set aside money each week to pay medical expenses that are not covered by your insurance, such as the deductible or the 20% co-pays you describe.

The reason that it helps you financially is that this medical expense account money comes out BEFORE taxes, and so you are required to pay fewer taxes. If you had paid this money out of your savings, it would have been AFTER tax money, and would do nothing to reduce your taxes.

In your situation I would add up what you expect the medical costs for the year to be, and base your contributions to the account on that amount. You can use a previous year to estimate. You know you will probably have to pay the complete deductible, so start with that figure. In any event, you should not exceed your out-of-pocket maximum unless you have dental and other covered medical expenses to factor in as well.

Be careful that you don't overestimate, and that you keep your receipts to get reimbursed, because if you don't use this money, you LOSE it under most plans. So I usually figure what I will need to spend in a year and select contributions to meet 80-90% of this, so that I don't overestimate.

Good luck!

Answer 2

Your company is probably contributing some money to the HSA account to make the transition easier. However, HSA plans are beneficial only if you have a "healthy" year where you did not accumulate a lot of claims. The whole concept of a HSA is that you build up a good size savings account over a few "healthy" years and if you have a large medical claim in the future, you have the money to pay for it.

Answer 3

Is a health savings account a good or bad?

Yes, an hsa is good or bad depending on the circumstances and how diligent you are. Make sure you understand the rules, then make sure you submit your bills promptly, keep them organized, and follow up after a set period of time.

If you set your monthly deduction too high, you can lose money which the company gets to keep, so don't over do it.

The money you put into an hsa is pre-tax (usually?), so that helps too.

Answer 4

You are definitely LUCKY to even have a health insurance from the company that you work for! Just think that there are thousands of people out there that do not have any....Okay, the pros for you is: example-You get sick or hurt and you were in the hospital for a week. Bill:$120,000. Insurance pays 80%. You pay 20%. Good deal.
Cons: You get sick, be in hospital for a week. Bill: $120,000.
No insurance. You are stuck with the bill and have to pay all out of your own pocket..

Answer 5

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Answer 6

Know ALL your option!!! If you are going to pay most of the bills out of pocket....Then check into fee for service plans.. Knowledge is power!!!! and their monthly fees are low...59.95 a month for the entire household!!! www.mybenefitsplus.com/40413633 GOOD LUCK!!!!!

Answer 7

I don't think so b/c if you have money left over at the end of the year you lose it. You can spend it on generic stuff at the pharmacy, but it all seems useless to me.

Answer 8

its both because it makes u pay bills but if u die which noone hopes will happen but if u do ur family will get tha money u kept on paying those bills 4 because they need 2 buy tha grave tha funeral and a bunch of different stuff so they have tha money 2 do it