One of the neat things that I get to take advantage of in my new job is that, for the first time, I have access to an Health Savings Account (HSA). In my previous job, I had access to a Flexible Spending Account (FSA), but the HSA is so much better.
The thing is, in order to get it all set up, I’ve had quite the adventure.
You Want an HSA?
A HSA is a great account for multiple reasons. First, unlike a FSA account, you don’t lose the money at the end of the year. Next, the money that you contribute earns interest, and you can invest it in mutual funds, stocks or bonds. It has, behind the scenes, an IRA basis—which means that the money that you have left in the account works for you. The FSA never did. Plus, with the Health Plan that I have, after I pay $1,500 per person, $3,000 for family, the rest of the health care is free!
Oh, and did I say that just like the FSA, the HSA is pre-tax.
So, What Do You Mean it is Fun?
Well, the problem with this plan is that, unlike a FSA, you cannot spend money that is not in there yet. You can reimburse yourself, but if something happened in January where you needed to pay up to the deductible, that’s out of pocket until you put enough in with payroll deduction.
When I signed up for an account (it’s a regular bank account at a bank that has a special account for the HSA), I saw in the welcome packet that you can make a one time payment from an IRA. When I called to find out what that was all about, I found that I could actually deposit $11,750 by counting it for both 2008 and 2009 max contributions. And I had just the money to fund it—a 401k plan that was more than this that had to move into an IRA in the first place.
You’re Losing Me
So, let’s just say that I can put money from my 401k into IRA and then into my HSA. Sounds simple, right? Well, my 401k/IRA company will only send me a check. No problem, I have a destination bank branch right next store, right? Nope, have to transfer it electronically. Ok, I got the check, can you come get it from my bank? Nope, have to send it. Send it via a wire transfer? That’s $30! No, send it from Bank-to-Bank Transfer.
After at least 20 calls, I have the Bank to Bank transfer getting approved by depositing change, and there’s a lot more to this (because it’s about as much as my down-payment on my house…
Well, I’ll let you know when it works out, but for now, I love the idea, but funding it is a lot harder than it could be.
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We’re in the process of going HSA too…hoping it will be the solution we’ve been looking for to being able to pay off oldest’s braces, since we didn’t have orthodontic insurance…
I found this post interesting, and would enjoy hearing how it works out for you.
Marys last blog post..Monday Mornings
Posted by Mary | January 12, 2009, 4:21 pmWe had an HSA when we were paying out-of-pocket for a high deductible plan. It was a good account and helped us out tax-wise.
Our strategy was to always contribute the max we could, which usually equaled out to our family deductible ($5,500). We kept the balance up so even something happened in January we could use the HSA money for it. Of course that was back in 2004-2005. The rules might have changed since then.
Even after we moved and got on a group plan through my hubby’s job, we still had a balance in our HSA. It was no big deal, though. I used it to pay for my vision exams and contact lenses (and a new pair of glasses!) and he used it for his dental exams. Unfortunately we used up all the money before he got a $700 bill for 4 cavities last summer.
Rachels last blog post..He Thinks He’s Funny
Posted by Rachel | January 15, 2009, 2:42 pmMary, so far it’s a comedy, but once I get some checks ordered and can change my ATM pin I think we’ll be good to go.
Rachel– what? No help on what to invest in? I’ve actually toyed with the idea of finally getting braces with the HSA money, since I never had the lump sum available before. I may be getting to old for it, though.
Posted by MInTheGap | January 23, 2009, 11:30 amGood luck on the braces! Guess what I’ve been reading about…how toxic our mouths are thanks to the ADA–American Dental Association. Methinks we are going to try to find a mercury-free dentist, and maybe save up to have our mercury fillings removed and replaced with a non-metal composite. Yikes. It’s scary stuff. http://www.dentistry-toothtruth.com THankfully, my dh has no fillings, and I only have 2-4. Our children don’t have any.
So as far as braces go…we’re still going that route (metal in the mouth–nickel is the most carcinogenic metal you can have in your mouth) for oldest daughter, as her’s are definitely not for cosmetic, but it’s really made me think twice, reading about all the reactions people are getting from their mercury fillings, gold crowns, etc. The ones that get the metal out are amazed at how their quality of life improves. Can’t understand why the ADA insists that mercury is safe, when it can’t even be disposed of casually…it’s illegal to let it into the environment…sewers, landfills, etc, pulled teeth with mercury fillings can’t even be sent through the mail…and most countries won’t allow it to be used by their dentists because of its known toxicity.
Sorry to get off your HSA track, but the subject of braces kept coming up.
You know how I keep mentioning Farmer John at my blog? His wife lost a decade of her life thanks to braces and mercury. She says she was a basketcase, unable to do simple tasks, bawling all the time, so depressed she wanted to end it all…and when she finally read about mercury poisoning, and got it all removed, she became a 100% different person. I can’t imagine her being the person she described. She’s an amazing, healthy, vibrant lady with more energy than three of me!
News on the HSA, in my sister’s case, if her HSA ever gets above $6000, it automatically rolls over into an IRA account. She’s getting 2.9 % interest on hers, after haggling with a local bank. There was some bank in Michigan who would have paid 3%, so they took the paperwork into the local bank and asked them to come as close as they could…
Better your HSA experience be a comedy and not a tragedy! What interest rate are they giving you?
Marys last blog post..Winter Hike
Posted by Mary | January 23, 2009, 6:37 pm