just found our our work offers HSA account. just want to get how others ynabers view HSA accounts?
I think it's awesome. You can use it for all medical expenses including dental and vision. In instances where you get a doctor's note, you can use it for gym memberships and massages. It rolls over from year to year and you can invest it. If you never have any medical needs, you can just use it like a retirement account and still get your money penalty free when you hit the age of 65.
I follow this order of operations:
- Invest in 401K up to employers match, if you can
- Max out HSA for the year, if you can
- Max out Roth IRA for the year, if you can
- Go back and max out 401K for the year, if you can
- Invest in a standard brokerage account
I just found out about the benefits of an HSA so technically I'm on step 2, but I already did step 3 for this year.
I stumbled across this about a week ago and after seeing what jclay12345 said about being able to INVEST the funds at a certain I became more intrigued and started to do some more research. I currently have money stashed away to cover our family deductible (thanks YNAB!) on a traditional 80/20 plan, but I've been considering moving us over to an HDHP/HSA when the annual renewal came up at my job since we have the money on hand to cover any expenses up to the deductible, and now I think I have officially been sold it.
I had one 10+ years ago when they first came to be (and I was a single guy, haha) and was a fan of it, but was told it probably wasn't a good thing for FAMILIES, so I haven't had one since I got married and started having kids.
I personally think HSA requires a different mental/financial approach because, from what I remember, you have to pay for everything 100% until you hit your deductible. There are no $25-50 co-pays for office visits or anything like that. I remember having to pay around $135 for an office visit way back when but I used my HSA to pay for it (pre-tax money). The thing with these plans though, once you hit your deductible the carrier pays for everything 100% as opposed to the 70/30 (or 80/20 in my case) split.
This might have been a problem for me/us a couple years ago but now (again, thanks to YNAB) we dollars stash whose job is specifically for medical expenses that count towards our deductibles, so like I said earlier, I'm going to give the HDHP/HSA a try again because I feel pretty confident in our current level of "financial maturity" (haha).
This Is JKB said:
The thing with these plans though, once you hit your deductible the carrier pays for everything 100% as opposed to the 70/30 (or 80/20 in my case) split.
Depends on the plan. You are on the hook for everything up to the deductible. Then there is a coinsurance split until you reach maximum out of pocket. Some plans, the deductible and max out of pocket are the same. You also need to pay attention to in-network vs. out-of network because they accumulate totals separately.
However, you do run into problems sometimes with things like emergencies where you have no control over in-network vs. out of network and you are individual billed by hospital contractors.
That's so key. And not just in emergencies. Just because the hospital you go to for your scheduled procedure is in network doesn't mean that the outside anesthesiology practice that they subcontract to is also in network and a lot of times you won't find that out until you get the bill.
There is nothing wrong with HDHP/HSA health plans, but there just isn't enough education to go with them. The government set them up with the idea that costs would go down because people would shop around more if it was "their" money, but no one taught them how to shop around. If you have cancer, you research the oncologist. But what about my anesthesiology example above. Or what if this reasonably priced oncologist with a great reputation works out of an in-network hospital but that hospital's lab is run by Lab Corp and your insurance has Lap Corp as out of network and Quest Diagnostics as in-network? You're going to be getting a lot of lab work done over the course of your treatment and lab work ain't cheap.
I did the rough math like this: Look at the premiums they will deduct from your paycheck and multiply by the number of paychecks in a year. That's the minimum cost; if you have no claims all year you will still pay that much. Now add the out-of-pocket maxiumum to that; that's the maximum you could possibly pay. In our case, the difference in premiums meant the high-deductible plan was much less money than the traditional plan, for both numbers, even before factoring in the pre-tax advantage. It doesn't feel cheaper while you're working through the deductible -- because the premiums are invisible -- but it is.
You still have to do the same plan comparisons as always -- size of network, breadth of coverage, and so forth -- but for us the two plans offered actually had the same coverage, different only in the deductible and OOP max.