In-Area Health Savings Account (Hsa) Medical Plan: Fill & Download for Free

Prompted by the Quora algorithm I thought I would post this question to the Health Savings Account topic area.My summary answer – As much as you can reasonably fit in your financial budget.A fuller response: The amount each of us should contribute will vary by individual and family, but keep in mind that Health Savings Account (HSA) funds never expire. The balance rolls over each year and is owned by you, the account holder. This account flexibility is slowly making its way into the consciousness of health care consumers, who for years have raced to spend down their Flexible Spending Account (FSA) each year before forfeiting the unspent amounts to their employer. However, there is still work to be done in getting the word out.Perhaps as importantly, health care expenses increase every year, meaning you are unlikely to “over-save” in a health savings account. Milliman publishes an annual index and for 2016 the value is over $25,000 for a family of four, the highest amount since Milliman started publishing this survey. The (slightly) more positive news, for 2016 anyway, is the rate of increase was “only” 4.7%, the lowest rate of increase since Milliman first measured their Milliman Medical Index (MMI) in 2001. But before you get too excited, this medical inflation number needs to be compared against the consumer price index (CPI). Published monthly by the Bureau of Labor Statistics, the CPI measures the rate of increase in the “goods and services” each of us buys. As of the July 2016 release the “seasonally adjusted” price increase over the last 12 months was 1.0%.Said differently, healthcare costs are increasing at a multiple of the cost of everything else. While it is true the consumer is often shielded from a portion of this increase, as employers have traditionally picked up the majority of the annual increase, this is less true today than, say, a decade or two ago. Predicting the future is a fool’s errand, but even still I would not project health care costs as a percentage of family budgets will go down in the near future.All of which is to say that you are likely to pay out of pocket health care costs at some point in the future, if not this year. Fidelity and HealthView Services annually publish estimates of total out of pocket healthcare costs in retirement, and for 2015 their estimates were $245,000 and $267,000, respectively. While these are averages and unlikely to be the precise number for anyone, it provides retirement savers a sense for what the experts are projecting. Further, while they may have slightly different methodologies, it is heard to imagine both would be off by more than a factor of two for the average couple.Finally, for here anyway, recognize that an HSA provides a “triple-tax” advantage, meaning the HSA is one of the most tax-efficient savings accounts you can open and invest through. The HSA is pre-income tax, pre-payroll tax (an advantage over traditional retirement plans, like the 401(k)), offers tax-free growth, and withdrawals are tax free for qualified health expenses (See IRS Publication 502 for the extensive list of qualified health expenses). Most HSA providers now offer a brokerage platform that allows savers to invest in many of the same mutual funds they can get through their employer (such as a 401(K) or 403(b)) and access via Individual Retirement Accounts or traditional brokerage accounts.For these reasons, and more, HSA’s are probably a good choice for many. The amount you ultimately contribute is heavily dependent on your budget, but if you have the financial flexibility you should consider saving as much as you can in these health savings investment vehicles. The 2016 IRS annual HSA limit is $3,350 for individuals and $6,750 for families.

In order to qualify for a Health Savings Account (HSA), you must enroll in a high deductible health plan. The high deductible plan would take less out of your paycheck each month, but you would pay for more of your medical services. You can pay for your deductible, co-pays, and other medical costs from your HSA after you build up your balance.If you want to pay less out of pocket for medical care, then the HSA plan does not meet your goal. If you want to pay less for your health insurance, then the HSA plan might suit you.An HRA plan does not require you to enroll in a particular health plan. Thus, you could choose a more generous plan and pay less out of pocket for medical care. The HRA itself is entirely funded by the employer. The more generous health plan would naturally cost you more to join, but less when you use medical services.The other factor to consider is how long you will stay with this employer. The HSA is a portable benefit; the HRA is not. You own the HSA funds; the employer owns the HRA funds. You can still use your HSA funds for future medical bills, even if you no longer have the qualified high deductible plan as your coverage.

The benefit of an HSA is that in most states they are triple tax advantaged - you can put in money tax free, any interest earned is tax free, and any withdrawals for medical related expenses if <60 or for any purpose if >60 are tax free.Preventive care is covered at 100% on health plans that include an HSA - however, be aware that preventive care is considered to be the government recommended tests (annual blood work, vaccines, pap smears, colonoscopies) and not items that are to prevent an existing disease or diagnosis.The down side is that you do have to pay 100% of the expenses up to the deductible - which is no greater than $2,500 for anyone that has employee + 1 or more coverage. However, after you have hit the $2,500 deductible, then the plan's coinsurance kicks in and you'll only have to pay somewhere between 10-30% of charges and there is an out of pocket maximum (no more than $12,500) after which the plan covers 100% of any future charge.The main thinking behind these type of plans is that they'll make you think about how and where you spend your money and that you'll make more cost conscious health care shopping decisions.However, if there's a whole debate about whether or not people have the tools available to make those kinds of decisions and what the actual link is between cost and quality.They can absolutely be a mixed bag from the employee perspective based on how much you're likely to spend on health care costs in the year. (And how much the employer might fund the health savings account).In case it's useful, one of the areas where people get quite surprised is on prescription coverage costs. I've had to help people out a few times find cheaper prescriptions and I put this list together on my blog : Saving Money On Prescriptions just in case it helps you at all.