HSA... Is it sending me to the poor house?

[holden007]

Mitch "the Blade" Daniels is killing education here in Indiana and my school is cutting the budget to survive. So, my school is changing insurance to HSA. As usual, I have no clue what this means for my personal budget. I have a son due in 2 weeks... what does all this mean for my family. Any help, insight, warnings, explanations would be helpful.

[holden007]

1. No advice?

Help... anyone... pros, cons... ANYTHING

[KansDem]

3. I afraid I don't know anything about HSA, but...

Here's to a healthy, happy child! :toast:

[LondonReign2]

4. Partial answer

HSAs (Health Savings Accounts) are basically high-deductible plans. That means you will have relatively low premiums, but rather high out-of-pocket expenses until you meet the deductible. The company will chip in a portion of this. If you don't use this portion, you can roll it over to use in subsequent years.

So, let's say your plan is a $2,000 deductible, and the company chips in $1,000. You'll either have to pay out of pocket until you hit that $2,000 (which is per person, BTW), or draw down on the amount the company kicks in.

IN theory, if you never get sick, you'll be able to roll over all that unused money to use for retiree medical expenses. In reality, it is very unlikely to ever happen.

We know that $1,000 doesn't go very far these days, so the likelihood of being able to roll over significant amounts to retirement is virtually nil. One moderate medical condition, such as out patient surgery, and all your money is used up. Chance are almost no one will have accumulated significant amounts toward covering retirement expenses.

What we are seeing (I'm in benefits consulting)is that this plan appeals to those who never have to dip into the company provided/rollverable amount--that is either the very young and healthy, or those that can afford to pay out of pocket instead of dipping into this amount. In fact, what this really is is another instance of the Shrub favoring the wealthy: what is happening is that the wealthy are simply not going to touch that money and pay out of pocket instead. Why? Because it is tax deductible. So they get a tax break on the $1,000, and pay out of pocket because they can afford it.

As far as a budget, you'll need to figure in the premium amount (deducted from your paycheck just as current medical coverage is), plus the out-of-pocket expense (difference between the deductible and the company provided amount).

Hope that helps some.

[unhappycamper]

2. Try posting this on the Indiana forum

I'm from mass