High Deductible Health Insurance and the lovely HSA

[Mike]

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I'm sure at least some of you have heard of this, but does anyone have it or is anyone planning on having it?

I switched health coverage effective for next year to GEHA, which is a high deductible health insurance plan for federal employees. This plan allows me to invest in an HSA, or health savings account.

The following is my initial take on the plan (based on the information I have in front of me - more to be added later I'm sure), positive and negative:

Advantages

*$60 out of premiums is deposited into the HSA each month (self)/ $120 (family)
*Money in the HSA grows tax-free
*Out-of-pocket money contributed to the HSA is tax deductible
*Can contribute $2600 annually to the HSA (self) /$5150 (family)
*Can invest HSA money in the stock market
*Can withdraw HSA money penalty-free for non-medical expenses in retirement (becomes just like an IRA at this point, except medical expense withdrawals are still not taxed)

Disadvantages

*High deductible ($1100 single / $2200 family annual)
*Probably a bad plan for older people who already have high medical costs
*Can invest in the stock market
*Fees

You can get info on the bank that runs the HSA here: hsabank.com - pay extra attention to the fees for brokerage accounts. Based on those, I probably won't be investing my HSA in the stock market 'til I can build the balance for about 2-3 years...

 

[Mike]

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The HSA covers you in making that high deductible - that is the point. Beyond that high deductible, the coverages look pretty similar to a traditional health plan. At $60 / month, that's $720 per year out of the premium amount dumped into the HSA. That covers most of an individual yearly deductible. Considering my age and health, I doubt I'll need anything in the first few years, anyway. I haven't used my insurance for diddly squat in the past two years. Dental is the only regularly-occurring one, and that is a supplemental deal anyway.

 

[WiseOne]

imported post

Thanks Mike - We received a web site at work today that runs a comparison on HSA and FSA and supposedly lists all the plans and compares each. I didn't have time to check it out- Tomorrow at work i will check it out and post the site heretomorrow night.