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Post by sd51555 on Mar 8, 2017 8:01:28 GMT -6
I don't get what is the big deal with a HSA? Looks like all the fee's can cancel out the write off to me. And you are basically costing yourself money because of the high deductible. Freeborn about nailed it there. You really shouldn't incur many fees at all unless you get into some avoidable situations. The only admin fee I've ever had to pay across three different HSA banks is a monthly account fee until I got the balance up to where they'd waive it. And those were no more than $2.50/mo. The tax savings on the front end are pretty obvious, what you put in is excluded from income tax, and payroll taxes, when done through payroll contribution (Not sure if that's available to the self employed). On the back end, the big tax break is that you get to use it tax free for "covered expenses", where the non-HSA folks have to foot their out of pockets with after tax dollars. You're about going to have to go bankrupt before you get a tax break for out of pocket health care now. Thanks to Obama, the thresh hold to take a medical expense deduction on your income taxes has been raised to 10% (or at least it was when Obamacare passed). He also upped the early distribution penalty to 20% on HSAs. But if you see all the outs, they can be a great little wealth generator. The whole idea was the young and healthy would save/invest the difference and be able to stay in high deductible plans as they began to consume health care services later in life, continuing to save them money. I'm a huge fan of them. Most my age had their heads up their ass when they should have been socking some cash into these. I didn't even know about them until I saw Bush talking about them in 2004 or so.
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Post by kabic on Mar 8, 2017 8:18:05 GMT -6
I thought about HSA, but hard to get into with kids.
I keep taking the insurance, and also FSA to pay out of pocket expenses.
FSA like HSA is pretax dollars, but differs in you have to use it in the current plan year.
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Post by MoBuckChaser on Mar 8, 2017 8:30:49 GMT -6
They offered an HSA to us this year as an option to our company sponsored plans. No way in hell! I will pay the $100+ per week premium before I sign up for something that doesn't provide anything in the way of prescription coverage, where every dime for your medications comes out of your own pocket. I have one prescription that would cost me more than my monthly premium, what do I do about the other two I'm on and the 1 my wife takes? Keep paying more out of pocket? HSA's do not work for everyone, especially those who have even minor medical conditions. They maybe great if you are young and completely healthy and can stash away every dime you put in to it, that's great, but if you have any kind of recurring medical expenses, you would likely not be able to contribute enough to cover yourself for the year AND stash anything away for future use. Yep, I agree fully! And I would not want another forced savings plan that the gov could change the rules and tap into at a later date. Another Pure Bullshit program if you ask me!
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Post by wiscwhip on Mar 8, 2017 9:06:24 GMT -6
Like Kabic, I do the company plan plus FSA. In addition to my company insurance plan, I contribute the max amount($2,550 this year, IIRC) to my FSA every year and I use every penny and still incur some "after tax" expenditures on top of it.
One thing I would like to see them put in place is to allow the pre-tax FSA contribution to be the full amount of whatever deductible your private insurance plan is covered at. I.E., if your out-of-pocket deductible is $4,000 per plan year, your allowable FSA contributions should be $4,000. Not sure how it would all go on the paperwork end, but it seems pretty simple at face value? Hell, if a guy is on a high deductible plan, say $10,000 per year, and he chooses to put in the full $10,000 and doesn't use it all, the Gobbermint keeps what's left, so what's to lose on their end? That is a win for them I would think? And if the guy actually needs the $10,000 to cover medical bills, he has it covered with "tax free" dollars.
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Post by wildfire123 on Mar 8, 2017 10:17:56 GMT -6
When people without any health insurance go to the emergency room, whom do you suppose pays for their visit? When they go to see a doctor, they receive a bill.
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Post by wiscwhip on Mar 8, 2017 10:38:39 GMT -6
Most of them don't pay it. They let it go to collection and then after a year the hospital is willing to settle for 50 cents(or less) on the dollar, so who is paying the difference? Everyone else that uses that facility, of course, given the hospitals have their rates set(higher than necessary) to accommodate the fact that a certain percentage of this is going to happen every year. Or at least that is what the hospital will tell you, even though they are making money even when they settle for the 50% reduced payment.
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Post by Bwoods11 on Mar 8, 2017 11:06:38 GMT -6
HSA plans are great for the self employed, and if you are relatively healthy. If you have a expensive prescription or doctor a lot, then a traditional plan is probably better.
I really like HSA plans. If the HSA is funded, your deductible will be gone...plus I like how they give you an HSA card and you can pay medical bills with it.
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Post by leexrayshady on Mar 8, 2017 23:55:12 GMT -6
our plan at work for in network is a deductible of $3250 per person/ $6500 for family With the annual out of pocket maximum being $3500 per person/ $7000 per family. So one nice thing about our plan is that the max out of pocket is very close to the deductible. Company also chips in $1900 to our has for family coverage. and Prescription drugs are %100 covered after the max out of pocket
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Post by nhmountains on Mar 11, 2017 5:11:50 GMT -6
HSA plans are great for the self employed, and if you are relatively healthy. If you have a expensive prescription or doctor a lot, then a traditional plan is probably better. I really like HSA plans. If the HSA is funded, your deductible will be gone...plus I like how they give you an HSA card and you can pay medical bills with it. Last year I knew I was having 2 knee surgeries so I signed up for the HSA. My deductible was $2500and maximum out of pocket was $3500. I maxed my HSA so it would cover my out of pocket for the year. My wife and I don't have any deductions so it I didn't have the HSA I'd have to write a check for $3500 for the maximum out of pocket. The HSA saved me on taxes for the $3500. I'm still adding to the HSA this year putting the savings of the difference between my work plans into it. Not sure if that's right but, that's what I went with.
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Post by MoBuckChaser on Mar 11, 2017 6:31:07 GMT -6
HSA plans are great for the self employed, and if you are relatively healthy. If you have a expensive prescription or doctor a lot, then a traditional plan is probably better. I really like HSA plans. If the HSA is funded, your deductible will be gone...plus I like how they give you an HSA card and you can pay medical bills with it. Last year I knew I was having 2 knee surgeries so I signed up for the HSA. My deductible was $2500and maximum out of pocket was $3500. I maxed my HSA so it would cover my out of pocket for the year. My wife and I don't have any deductions so it I didn't have the HSA I'd have to write a check for $3500 for the maximum out of pocket. The HSA saved me on taxes for the $3500. I'm still adding to the HSA this year putting the savings of the difference between my work plans into it. Not sure if that's right but, that's what I went with. A $3,500 write off saved you $3,500 in income tax? How was that?
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Post by sd51555 on Mar 11, 2017 7:08:32 GMT -6
HSA plans are great for the self employed, and if you are relatively healthy. If you have a expensive prescription or doctor a lot, then a traditional plan is probably better. I really like HSA plans. If the HSA is funded, your deductible will be gone...plus I like how they give you an HSA card and you can pay medical bills with it. Last year I knew I was having 2 knee surgeries so I signed up for the HSA. My deductible was $2500and maximum out of pocket was $3500. I maxed my HSA so it would cover my out of pocket for the year. My wife and I don't have any deductions so it I didn't have the HSA I'd have to write a check for $3500 for the maximum out of pocket. The HSA saved me on taxes for the $3500. I'm still adding to the HSA this year putting the savings of the difference between my work plans into it. Not sure if that's right but, that's what I went with. That is exactly what you're supposed to do.
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Post by Freeborn on Mar 11, 2017 8:22:09 GMT -6
Last year I knew I was having 2 knee surgeries so I signed up for the HSA. My deductible was $2500and maximum out of pocket was $3500. I maxed my HSA so it would cover my out of pocket for the year. My wife and I don't have any deductions so it I didn't have the HSA I'd have to write a check for $3500 for the maximum out of pocket. The HSA saved me on taxes for the $3500. I'm still adding to the HSA this year putting the savings of the difference between my work plans into it. Not sure if that's right but, that's what I went with. A $3,500 write off saved you $3,500 in income tax? How was that? NH uses pre-tax dollars to pay after tax expenses. HSA Example.pptx (70.98 KB)
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Post by MoBuckChaser on Mar 11, 2017 8:26:44 GMT -6
A $3,500 write off saved you $3,500 in income tax? How was that? NH uses pre-tax dollars to pay after tax expenses. $1,100 I can understand, not the $3,500 he said it saved him in taxes. I must have read it wrong.
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Post by westbranch on Mar 11, 2017 9:23:40 GMT -6
Like SD mentioned previously, if you work for a company that HSA taken out of payroll you will also save on FICA taxes. And if you have to pay a portion of your health insurance out of payroll you save both FICA and income taxes. A single person making 60k a year in MN could easily have marginal rates of 35%+ including FICA, so maxing their HSA at $3,400 for 2017 would save close to 1,200 in taxes. The health insurance a company pays for employees is not included in wages either. The employer does not have to pay FICA on the health insurance or any HSA contributions paid as "wages" either.
But, a self employed person only saves on income taxes when they put money into a HSA and buy health insurance on their own. They have to pay SE tax based on business net income prior to the HSA and self employed health insurance deduction.
If you work for a company that doesn't offer health insurance and you buy on your own you do not save any taxes. What a wonderful system.
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Post by sd51555 on Mar 12, 2017 21:05:19 GMT -6
Bingo! You nailed it right there WB.
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