Direct Deposit Form For Health Savings Account (Hsa: Fill & Download for Free

Given the continued evolution of healthcare insurance I wanted to provide an update to the responses initially posted to this thread in 2013.The short answer remains yes, Health Savings Account (“HSA”) plans can be beneficial to employees. However, and like most new things, HSAs require some education and experience before they begin to feel familiar.The good news is after the adjustment period many consumers find the benefits of an HSA a vast improvement over Flexible Savings Accounts (or “FSAs”). Conveniently, FSAs are paired with traditional health insurance plans (e.g. PPOs), meaning there is a large “installed” user base familiar with some of the basics of pre-tax payroll deductions for health care expenses that also apply to HSAs. Among the many benefits and advantages, HSAs combine the flexibility of FSAs with the long-term oriented, investment options of retirement accounts, like 401(k)s and IRAs.To appreciate this additional feature, as well as perhaps encourage you to make the most of your HSA, consider this: the costs of healthcare continue to rise at a rate greater than inflation, often 2-3 times more than inflation (those interested can compared the Milliman Medical Index to BLS CPI for an annual look, as one measure). At the same time, employee contributions to the cost of their overall health care expenses have grown at a rate greater than the actual growth in health care cost (see Kaiser Family Foundation 2016 Employer Health Benefits Survey, Exhibit D).What this means is the cost of health insurance continues to rise, regardless of form (e.g. PPO, HDHP, HMO, ACO). This is often hard to detect the full impact, as health care insurance plan premiums, deductibles, co-pays and even health provider network access, are all periodically adjusted to reflect the expanding bill of health care. Still, many now find that even traditional non-High Deductible Health Plans appear to have high deductibles of $1,000 or more - a trend likely to continue given the cost dynamics mentioned above - yet do not qualify for pairing with a Health Savings Account. [The IRS determines the health insurance plan conditions which allows taxpayers to open on HSA – for more see IRS Publication 969, Health Savings Accounts and other Tax-Favored Health Plans].For the employee in traditional health care insurance plans, then, more and more funds must be directed to the FSA to achieve the full tax benefits, while still being subject to a “use or lose” condition at year end. This is in addition to an overall increase in insurance premiums, which as mentioned above can be substantial from year to year.Enter the HDHP/HSA combination. While the insurance premium in HDHPs over savings over traditional PPO’s can often be $50-100/month or more (see KFF study referenced above), what the HDHP/HSA combination really offers is an ability to save for future health expenses. While you many not have significant out of pocket expenses in the first year, HSA funds can “pre-fund” expenses you may have in later years.Funds deposited in an HSA never expire.By now most of us are used to seeing advertisements at the end of the year encouraging us to spend our FSA money before we forfeit the funds back to our employer (see Sect 125 Cafeteria plans for more details). HSAs are not subject to this limitation, though you may still come across advertisers who want you to spend your HSA dollars with them.HSAs can even be withdrawn for non-health care related expenses.Unlike FSA disbursements, which must be authorized by the trustee holding the funds, HSA providers will reimburse you at your request for both healthcare and non-healthcare related expenses. Taxpayers are responsible for determining which expenses are qualified, unlike an FSA, though once taxpayers reach the age of 65 these funds are no longer subject to a 20% penalty. At that point taxpayers only pay ordinary income taxes, so similar to the tax treatment of an IRA or 401(k). This makes an HSA a combination of FSA and IRA, if you will, with tax-free treatment if used as the former and tax deferred treatment if used as the later. Unusual to find a free option in the US tax code.Regarding employers. For employers who must decide how employee compensation dollars are allocated – generally money spent towards health care costs decreases money for employee salaries and bonuses – HDHP/HSA combinations can be very attractive options. Recall employers still pay the overwhelming majority of the costs (see KFF study), despite the trend towards increasing health care costs being absorbed by employees. Therefore the more more efficient employers can spend funds purchasing health insurance on behalf of their employees, the more money is left to direct elsewhere, including other compensation components, like employe salaries.Finally, regarding employer contributions into employee Health Savings Accounts, there is no strict guideline. Generally speaking employers consider “seeding” the HSA account on initial conversion, as we did at HelloWallet (now Morningstar) where I was CFO. We also made matching contributions to employee HSA payroll deductions, similar to the way many companies match 401(k) contributions. However, and as mentioned above, companies must balance matching cash contributions with other compensation priorities.Looking forward, much the way many employers match 401(k) and other qualified retirement plan contributions, I suspect over time employers will tend to see HSA contributions as a way to encourage their employees to act in their own best interest. The HSA can be a much more flexible and tax efficient savings account, both short and long term, but this will take time for the market, and our individual behavior, to adjust.Finally, a word about us. We built an app, HSA Coach, to educate users on Health Savings Accounts, as well as assist them with keeping track of contributions and withdrawals, as well as record keeping. The above may sound daunting, particularly as you move from employer to employer or even as your employer switches HSA providers, which happens often. We have some financial planning calculators to help plan contributions, and even compare to other employer plans, like a 401(k) [I’m a CFP® and we couldn’t help ourselves…]. We back up to Dropbox should you use that cloud service as a document storage solution.More at HSA Coach.

Health Savings accounts are excellent short-term and long-term savings vehicles, have triple-tax advantages, and have flexible contribution and distribution options. They combine the best aspects of a checking account, savings account, retirement account and investment account into one single account.You can contribute to an HSA if you participate in an HSA-compatible health plan. The funds can be used that same year or rolled over for longer-term use. You can use the funds tax-free on qualified medical expenses anytime, even if you are not currently in an HSA-compatible health plan.How do they work?Funds are deposited either pre-tax through your payroll deduction or post-tax from another bank account, such as your checking account.Many banks offer convenient online contribution methods so you can save from the convenience of your sofa.Contributions are limited by the IRS: $3400 for individuals in 2017, $6750 for families in 2017. If you’re 55 or older, you can contribute $1000 more per yearFunds can be distributed several ways.Use your debit card where cards are accepted for immediate withdrawal from your account. For example, at the pharmacy or your doctor’s office.Pay your provider directly via online bill payment, if your bank provides this option. Just like bill payment for your mortgage, your bank will send the payment to your provider for you with funds from your account.Reimburse yourself for medical expenses you paid out of pocket for. Some banks offer this option online, others use paper forms.Invest in longer-term savings options such as mutual funds. Many banks offer linked investments to the HSA account for low incremental fees, but higher returns than the account itself. For those looking for longer-term savings, this is a a great opportunity, similar to a 401(k).

I agree with Ashton, without knowing the details it’s hard to tailor the response. So much of healthcare is specific to the individual. Preferences, usage and risk tolerance all factor into the decision. That said, below are a few principles to keep in mind when selecting your healthcare options:1. Healthcare costs will continue to rise. Understanding how health insurance works enables you to save money. Healthcare costs have been on the rise for the past few decades. Employees have largely been sheltered from this dynamic, as until recently employers absorbed the rising healthcare costs. This ischanging. Most companies can no longer afford the full cost of the annual increase and are “cost sharing” with employees. Your choice of insurance plan, as well as how you use the services – in network vs. out of network providers, prescription drug benefits, price shopping, etc. – will matter more and more to your checking account.Fortunately, employers are rolling out decision support tools (e.g. Meet Alex of Jellyvision) to help employees understand their healthcare options better. Knowing how health insurance works will become increasingly important to your financial bottom line.2. Kaiser’s approach may work for some. Kaiser wants to coordinate healthcare delivery using their network, and in theory provide better care for a lower cost. Kaiser’s price compared with more traditional insurance carriers depends on the geographic market. In some cases Kaiser may be higher, lower or about the same (so I am told). However, and as with all health insurance, you are paying for services you may or may not use. Whether your plan represents a “good value” depends in large part on your usage.3. Health insurance is two parts: 1) insurance and 2) pre-negotiated service agreements. Health insurance bundles individual health risks – you plus many others – and estimate costs for covering the entire pool. In some years you never use your health insurance, in which case you will pay for a service you don’t use, in effect subsidizing the pool. Other years you may make extensive use of the health network and receive more service than you paid for. This represents the insurance portion, more or less, and acts like other forms of property casualty insurance (car, home). The second element of health insurance is the “network.” Health insurance carriers negotiate pricing with hospitals, doctors, prescription drug networks, etc., and afterwards recommend you to one of these “preferred provider” relationships. Health providers agree to lower compensation in exchange for a large volume of customers. In theory you receive a lower price for the “bulk buy” arranged on your behalf. It is also why you are penalized when you go “out of network.” However, and for reasons beyond the scope of this response, this is changing. There is a mostly quiet, “consumer-driven” healthcare revolution occurring.4. Expect health plans to change frequently. Because the health industry is under increasing pressure to balance cost with value - health as a segment of the economy is expected to grow from 18% of GDP currently to 20% over the next decade - networks, premiums, co-pays, deductibles and many of the other details are likely to change, sometimes year to year. Employers are sensitive to this dynamic and avoid plan changes where possible, but in the end they must balance total employee compensation costs with other expenses. Sometimes they have no choice but to pass along cost increases, as well as implement other plan design changes. It may not always feel like it, but you and your employer are trying to make the best choices in a dynamic market.5. A high deductible health plan (HDHP) and Health Savings Account (HSA) combination can be a good hedge against increasing healthcare costs. Neither you nor your employer can control healthcare expansion as a percentage of GDP, but you can (and should) look for ways to save on your healthcare costs. In general, the health premiums for HDHP’s are lower than traditional PPO/HMO plans and increase at a lower annual rate. On average you should save money on monthly premiums compared with your traditional healthcare plan alternatives, in exchange for accepting a higher deductible. [This is, by the way, how other forms of insurance work, and why a $300 deductible car insurance policy is cheaper than a $50 deductible plan.] However, one of the biggest advantages to a HDHP is the Health Savings Account, which allows you to save money tax free and grow it tax free, to pay for future medical costs. Much the way compound interest growth of healthcare costs have accelerated healthcare insurance costs, an HSA allows you to use compound interest to your advantage– you have the ability to invest your account balance and grow your account it faster than the average annual rate of growth in healthcare costs. For example, according to the Kaiser Foundation healthcare costs grew 4.5% in 2014 (for comparison and to underscore the issue the Consumer Price Index (CPI) increased only 0.8%), you can use your HSA to invest in the market where over the long term you can expect 7-10% annual growth. Not only can you keep up with medical inflation, you have the opportunity to outpace it.6. You can choose any HSA provider you like, not just the one offered through your employer. Unlike a 401(k) plan, an employee can select any HSA provider they like. All you have to do is open a second HSA account and roll your funds from your first account into the second one via a trustee-to-trustee transfer, much the way you can an IRA. Three things to keep in mind when selecting a different HSA: 1) employer payroll deposits will only be made to the employer selected HSA plan and payroll tax savings of 7.65% can only be saved through direct payroll deposits; b) you are limited to one rollover per year if you take the distribution yourself (trustee to trustee transfers are unlimited - see IRS Pub 969 for details); c) many HSA plans penalize accounts with low balances by charging a monthly fee. This may not be worth the trouble for small HSA balances. But if you choose to save and incorporate your HSA into your overall retirement savings plan (see more about this at our startup, HSA Coach), you may find you appreciate the flexibility and find an HSA provider with better, cheaper investment options.Health insurance is complicated – even for people who work in the industry – so you are right to be asking questions. It’s a habit that will serve you well. Unfortunately, because of the dynamics of the industry your options and plan specifics will move around. You’ll have to invest a little time to make sure you understand what you are paying for year to year. Finally, keep your eye on the healthcare consumer model. Your bank account may thank you.