Health Care Savings Account

Managing your TSP and alternate investment options after retirement or separation from service.

Moderator: Aitrus

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LoGiK
Posts: 122
Joined: Mon Jul 30, 2012 7:59 pm

Health Care Savings Account

Post by LoGiK »

I'm curious if anyone here has an HSA. I've been reading about retirement goals and how people invest their money while they're working and I ran into these. Looking to get inputs on if people use them - why or why not?
No clue what I'm doing, but willing to learn.

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Aitrus
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Posts: 2391
Joined: Mon Aug 06, 2012 5:03 pm

Re: Health Care Savings Account

Post by Aitrus »

I've been using one for the last 5 years or so. I find that it does lower my taxable income since I'm kinda on the cusp between tax brackets, and it's not much trouble so long as the insurance companies play nice.

How it works is like this:

1. You opt to pay into an HSA. Amount is up to you, and there's usually an annual minimum as well as a maximum amount. I think the minimum is somewhere around $250 for 2015, but I could be wrong.
2. You start making regular paycheck deductions.
3. Regardless of how much you have in your account or what time of year it is, you need to see the doctor, so you go in.
4. After you get seen, your doctor will bill your insurance. You already paid your estimated share at the doc's office, usually in the form of copays, etc.
5. If your doc's office staff are good, they'll send the amount you paid to the HSA. They also do their thing with the insurance company.
6. Your insurance does it's thing with the doc's office. If it's a good insurance, they'll also send info to the HSA. If not, then they send the info to you, and you make an online claim with the HSA, including scanning and uploading receipts, explanations of benefits, etc.
7. Within a certain time, usually within a week or so, you get paid from the HSA.
8. Doesn't matter how much you have in your HSA account when you see the doc, you get paid in full for that visit until you hit the annual limit you said you'd pay into it. You keep paying into the account all year until you hit the amount you said you'd pay into it. This part I'm fuzzy on - not completely sure that they'll pay you in full right away, or paycheck by paycheck, if you have an expense that's more than you've paid in so far for the year. Maybe somebody can verify this aspect of it for me?

Since I'm an ANG weekender, I have access to their Metlife (ML) dental plan. The problem with ML is that they wait for my primary insurance, Blue Cross / Blue Shield (BCBS) to do it's thing, which includes sending the explanation of benefits to the dental office. Then the dentist's office will send the BCBS explanation of benefits to ML. ML then decides if they want to pay, and they have all kinds of nit-picky rules about the submission formats, claims, etc. When they finally do agree to pay, they send one check to me and a check to the dental office, but don't send anything to FSA Feds, which is the HSA we Civil Service folk use. I have to send the ML explanation of benefits in to FSA to get paid, but it can take months for the ML explanation to arrive at my house.

On the flipside, whenever I use BCBS, they send the info directly to FSA. No fuss, no muss, very neat and tidy. Takes about a week from the time I see the doctor to the time I get paid.

FSA covers tons of things. Copays, prescriptions, etc. Even sunblock and cold medicine, IIRC. As long as it's on the list of approved coverages, and you have a receipt, then you can submit a claim for it. There's a threshold of $10, meaning that they won't pay for your $6 worth of meds, so the $6 is held in reserve until the amount they owe you goes above $10. Then they credit your account for whatever it is over $10, plus the $6 held over from before. Cuts down on their overhead to have a minimum payout limit, I guess.

The way I use it is to take a look at my family's upcoming expenses for the coming year, then add a little extra for unexpected events. For example, I had 4 crowns done over the last 2 years, plus a few fillings among the family, plus one checkup / cleaning visit to the dentist's office per person per year, plus one doctor's visit copay per person per year for normal checkups, plus 2 extra visits for the family per year for general sickness, plus the cost of all the medications we plan to purchase over the year. We calculate all that up, and make that the amount we pay into the FSA. In the past we had to lowball it a little because what you didn't use by the end of the year was forfeited to FSA, but now the new rules let folks carry over $500 to the next year, starting with allocations in 2015.

To me, it's worth the hassle of having to scan and upload the few receipts I end up needing to do, but the FSA site is pretty well done, and if I call I'm never on hold for very long. I think it comes down to whether or not your insurance makes it easy for you by doing the paperwork for you. If you're with BCBS, then it's easy. If it's a dirtbag company like ML, then it's a real PITA. We're dropping ML this year, and opting for a slightly different version of BCBS that covers emergency dental, since all the major stuff is taken care of for the next few years at least.

Hope that helps.
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kd7jds
Posts: 5
Joined: Wed Sep 28, 2011 2:09 pm

Re: Health Care Savings Account

Post by kd7jds »

Pretty much exactly as Aitrus describes, and yes I have used FSA for about 10 years starting at the minimum or $250 all the way up to $5000 when that was allowed. And I did the 5K when I had two in braces, got the braces started in Jan and Feb got reimbursed before the end of Mar and payed in equal payments throughout the entire year. Easy peasy!!! Highly recommend, no more trying to figure percentage of medical versus gross income which we could never meet anyway.

A great way for co-pays and deductibles to be dealt with.



Aitrus wrote:I've been using one for the last 5 years or so. I find that it does lower my taxable income since I'm kinda on the cusp between tax brackets, and it's not much trouble so long as the insurance companies play nice.

How it works is like this:

1. You opt to pay into an HSA. Amount is up to you, and there's usually an annual minimum as well as a maximum amount. I think the minimum is somewhere around $250 for 2015, but I could be wrong.
2. You start making regular paycheck deductions.
3. Regardless of how much you have in your account or what time of year it is, you need to see the doctor, so you go in.
4. After you get seen, your doctor will bill your insurance. You already paid your estimated share at the doc's office, usually in the form of copays, etc.
5. If your doc's office staff are good, they'll send the amount you paid to the HSA. They also do their thing with the insurance company.
6. Your insurance does it's thing with the doc's office. If it's a good insurance, they'll also send info to the HSA. If not, then they send the info to you, and you make an online claim with the HSA, including scanning and uploading receipts, explanations of benefits, etc.
7. Within a certain time, usually within a week or so, you get paid from the HSA.
8. Doesn't matter how much you have in your HSA account when you see the doc, you get paid in full for that visit until you hit the annual limit you said you'd pay into it. You keep paying into the account all year until you hit the amount you said you'd pay into it. This part I'm fuzzy on - not completely sure that they'll pay you in full right away, or paycheck by paycheck, if you have an expense that's more than you've paid in so far for the year. Maybe somebody can verify this aspect of it for me?

Since I'm an ANG weekender, I have access to their Metlife (ML) dental plan. The problem with ML is that they wait for my primary insurance, Blue Cross / Blue Shield (BCBS) to do it's thing, which includes sending the explanation of benefits to the dental office. Then the dentist's office will send the BCBS explanation of benefits to ML. ML then decides if they want to pay, and they have all kinds of nit-picky rules about the submission formats, claims, etc. When they finally do agree to pay, they send one check to me and a check to the dental office, but don't send anything to FSA Feds, which is the HSA we Civil Service folk use. I have to send the ML explanation of benefits in to FSA to get paid, but it can take months for the ML explanation to arrive at my house.

On the flipside, whenever I use BCBS, they send the info directly to FSA. No fuss, no muss, very neat and tidy. Takes about a week from the time I see the doctor to the time I get paid.

FSA covers tons of things. Copays, prescriptions, etc. Even sunblock and cold medicine, IIRC. As long as it's on the list of approved coverages, and you have a receipt, then you can submit a claim for it. There's a threshold of $10, meaning that they won't pay for your $6 worth of meds, so the $6 is held in reserve until the amount they owe you goes above $10. Then they credit your account for whatever it is over $10, plus the $6 held over from before. Cuts down on their overhead to have a minimum payout limit, I guess.

The way I use it is to take a look at my family's upcoming expenses for the coming year, then add a little extra for unexpected events. For example, I had 4 crowns done over the last 2 years, plus a few fillings among the family, plus one checkup / cleaning visit to the dentist's office per person per year, plus one doctor's visit copay per person per year for normal checkups, plus 2 extra visits for the family per year for general sickness, plus the cost of all the medications we plan to purchase over the year. We calculate all that up, and make that the amount we pay into the FSA. In the past we had to lowball it a little because what you didn't use by the end of the year was forfeited to FSA, but now the new rules let folks carry over $500 to the next year, starting with allocations in 2015.

To me, it's worth the hassle of having to scan and upload the few receipts I end up needing to do, but the FSA site is pretty well done, and if I call I'm never on hold for very long. I think it comes down to whether or not your insurance makes it easy for you by doing the paperwork for you. If you're with BCBS, then it's easy. If it's a dirtbag company like ML, then it's a real PITA. We're dropping ML this year, and opting for a slightly different version of BCBS that covers emergency dental, since all the major stuff is taken care of for the next few years at least.

Hope that helps.

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RGEN
Posts: 228
Joined: Sun Jan 27, 2013 12:12 am

Re: Health Care Savings Account

Post by RGEN »

My advice is to at least use HSA to cover the medical insurance deductibles and dental cost that are not covered by some other means, i.e. other insurance or employer accounts. It covers those early in the year out of pocket expenses before the insurance kicks in.
RGEN

areadenial
Posts: 4
Joined: Sun Apr 15, 2012 1:26 am

Re: Health Care Savings Account

Post by areadenial »

Clarifying one point: Fed employee HSA and FSA, though similar, are not identical.

Among the differences, HSA is available to feds under a limited set of circumstances (e.g. coverage under a single high premium, high deductible health plan) and funds roll over from year to year. FSA allows broader participation, but funds are use or lose within a certain time period.

When I first started with an FSA, I went to the eligible expenses page and marked off every expense I'm guaranteed to have yearly, such as glasses and co-pays for recurring Rx and regular checkups and made that minimum my contribution to be safe on not losing funds. For me, that formula tends to drain the account by fall, so I contribute a little more now.

If you have recurring expenses not completely covered by your health insurance, I don't see a downside to whichever of these tax-free accounts you qualify for:
http://www.opm.gov/healthcare-insurance ... -accounts/
http://www.opm.gov/healthcare-insurance ... s-account/

~AD

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LoGiK
Posts: 122
Joined: Mon Jul 30, 2012 7:59 pm

Re: Health Care Savings Account

Post by LoGiK »

Wow! Great information there Aitrus, took me a few read through to understand most of it.

Sorry for my ignorance, just trying to see if I'm understanding this. Since I'm covered with Tricare in the military, an HSA/FSA isn't really a priority for me.
No clue what I'm doing, but willing to learn.

areadenial
Posts: 4
Joined: Sun Apr 15, 2012 1:26 am

Re: Health Care Savings Account

Post by areadenial »

Logik,
If you're active duty and not married, I don't think either account is actually available to you.

- No Tricare plan is considered high premium, high deductible to be legally eligible for an HSA.

- Active duty military personnel are themselves not eligible for the FSAfeds that civilian Executive Branch employees use. (However, if married, they can claim their out-of-pocket medical expenses under the spouse's FSA.)

- If your year is split between federal civilian employment and active duty military, you are partially eligible for FSAfeds. The bottom two links about call up/return from military service at the OPM Fast Facts page go into detail on what happens to your FSAfeds account during active duty. http://www.opm.gov/healthcare-insurance/fastfacts/

Unfortunately, I'm not aware of any FSA for active duty military. I've only heard of people with substantial out-of-pocket expenses on Tricare Standard picking up a Tricare Supplement insurance plan from a military association to save money, but that's a completely different beast.
~AB

kteeple
Posts: 73
Joined: Fri Nov 16, 2012 10:18 pm

Re: Health Care Savings Account

Post by kteeple »

Logik,

Are you talking about a FSA or HSA? They are 2 seperate things. HSA is for those with high deductible plans and you can put in each year. That amount if not used is rolled over to the next year and the year after and so on until such time as you need it to pay copays and deductible. FSA, on the other hand, you can put in so much each year but if you haven't used it by the deadline it is just gone. No refund. Starting in 2015, they have started allowing for $500 to be carried over to the next year, but anything more than that is lost money.

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LoGiK
Posts: 122
Joined: Mon Jul 30, 2012 7:59 pm

Re: Health Care Savings Account

Post by LoGiK »

kteeple wrote:Logik,

Are you talking about a FSA or HSA? They are 2 seperate things. HSA is for those with high deductible plans and you can put in each year. That amount if not used is rolled over to the next year and the year after and so on until such time as you need it to pay copays and deductible. FSA, on the other hand, you can put in so much each year but if you haven't used it by the deadline it is just gone. No refund. Starting in 2015, they have started allowing for $500 to be carried over to the next year, but anything more than that is lost money.


Thank you for more clarification. I was originally talking about a HSA, Airtus brought up the FSA. I thought I was understanding it all but your post clarified everything up for me.
No clue what I'm doing, but willing to learn.

floridabre
Posts: 24
Joined: Thu Sep 11, 2014 7:48 am

Re: Health Care Savings Account

Post by floridabre »

i have a High Deductible Health Plan (for the past 3 years) and it has the HSA. For 2014 didnt enroll in FSA as my wife and i are in relatively good health - i'm 52 and she is 56.

She will be having some expensive dental work this year (and next) so i am looking at ways to minimize the overall impact to our budget. i didnt enroll in supplemental dental insurance this year [2014] (the previous year [2013] we did have both HDHP and a supplemental dental plan but it didnt really cover any of the work she had done).

If i understand my options correctly, i can use any potion of the HSA to pay the uncovered Dental expenses. Additionally for 2015 i can start a FSA (even if i keep the HDHP and its HSA, there is FSA but with different rules as the FSA for those without a HSA).

because of my wife's preferences and here periodontal disease the dental work is fairly expensive - a 'permanent bridge' to replace 5 front bottom teeth was estimated to cost $8000, plus the cost of removing the teeth that was somewhere around $800.

anyone have some suggestions for me?

LoGiK wrote:
kteeple wrote:Logik,

Are you talking about a FSA or HSA? They are 2 seperate things. HSA is for those with high deductible plans and you can put in each year. That amount if not used is rolled over to the next year and the year after and so on until such time as you need it to pay copays and deductible. FSA, on the other hand, you can put in so much each year but if you haven't used it by the deadline it is just gone. No refund. Starting in 2015, they have started allowing for $500 to be carried over to the next year, but anything more than that is lost money.


Thank you for more clarification. I was originally talking about a HSA, Airtus brought up the FSA. I thought I was understanding it all but your post clarified everything up for me.

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