4 ms·

I'm against Obamacare, but if I was for it, I would peg the penalties at 2x the avg basic exchange coverage price. Also, people with high deductibles should ma

by dpweb 11y ago

I'm against Obamacare, but if I was for it, I would peg the penalties at 2x the avg basic exchange coverage price. Also, people with high deductibles should make sure you take advantage of tax benefits, HSA for instance. The $6000 deductible may really only be a $4800 deductible once you figure in the tax deduction. If you're talking Obamacare coverage being 20% higher than the penality (I'm assuming the penalty is not tax deductible) that may end up being a wash and you're better off with the coverage. Now consider the guy paying the $1800 penalty instead of the $2900 coverage. The coverage being effectively $2175 (considering a 25% tax break). He pays $1800 for nothing instead of $2175. Passing up $375 coverage. Again, Obamacare - pretty much a debacle as far as costs - but that guy maybe not be the wisest choice.

pmorici 11y ago
My current plan has an has an HSA component but the company that administrates the account, BenefitWallet, has some fine print in the account agreement that they charge an account fee for balances less than several thousand dollars. Realistically I only spend several hundred dollars per year on healthcare stuff so I don't think it is to my advantage to lock up that much money in a non-interest bearing account or pay the bank 120 bucks per year.
- mecameron 11y ago
  You are not required to use the HSA provider that your insurer/employer is tied to. You can pick and contribute to your own HSA account elsewhere, with one caveat. Your contributions are deductible from federal and most state taxes, but are only deductible from payroll taxes (social security/medicare) if the HSA contribution is deducted from your paycheck by your employer (and thus deposited in their preferred HSA provider).
  - pmorici 11y ago
    Yeah, in my case it isn't though my employer either so there is another reason to avoid it.
- dpweb 11y ago
  I called the bank and they stopped charging me their HSA monthly fee, and credited back the past months fees - FYI. I won't say which bank it was, but it rhymes with Smells Smargo!
  - abawany 11y ago
    I opened an HSA with my credit union (First Tech Federal). It has no monthly fees and even pays 1% interest, which is tax free as well.
- brewdad 11y ago
  One advantage to consider is that there is no time limit on when you spend the money. As you age, your health care costs will rise. How much interest are you really making on $5000 in today's environment? $50? $100? Meanwhile, you save your marginal tax rate on any dollars contributed towards future medical expenses. That's a pretty good return on your money. $5000 at 28% marginal rate knocks $1400 off your tax bill.
  - pmorici 11y ago
    ~7% ($350)
- okbake 11y ago
  I'm pretty sure that with HSAs you're not tied to a particular administrator. I think that you can get one from any administrator you want. If it's through an employer then they might only do direct paycheck deposits to a particular administrator, but you're able to opt-out of that and do the deposit yourself. Don't listen to me though, I could be wrong, but it's worth looking into if you're considering an HSA.
- xirdstl 11y ago
  As others have said, I think you can use another company. Also, some companies will allow you to invest any money above a certain balance. In my HSA, I can invest anything about $2000 (or maybe $2500?) into a number of different mutual funds. That plus tax benefits plus tax free growth is a pretty good deal.
- rsync 11y ago
  Just contact your bank and open an HSA account with them - they'll fall all over themselves to help you do it. It will be interest bearing and you can tie it to bill-pay and issue mailed checks directly out of it. It's great. Also, you can leave unused HSA funds in the account and let them grow, tax free, for future medical needs.[1] [1] https://www.irahelp.com/slottreport/how-you-can-utilize-hsa-now-save-retirement https://www.irahelp.com/slottreport/how-you-can-utilize-hsa-...
- spiralpolitik 11y ago
  Look for a HSA that is backed by a money market account. If you are young and healthy then a HSA based plan makes sense as you can put money away until you needed it. Better than paying premiums you never use. If you start paying it at 20 then you are looking at decent amount later in life assuming the stock market delivers. If you have ongoing healthcare costs then the math becomes a wash and usually sticking with a PPO type plan is the way to go. Looking longer term I can see the HSA becoming the norm and employers will pay into that rather than offering insurance plans. At this point the exchanges should become competitive enough to drive costs down if everything happens through the exchange.
dplgk 11y ago
It seems like you're saying you can write off any medical expenses which doesn't seem to be true according to the internet > The IRS allows you to deduct qualified medical expenses that exceed 10% of your adjusted gross income for the year.
- chimeracoder 11y ago
  > It seems like you're saying you can write off any medical expenses which doesn't seem to be true according to the internet He's referring to an HSA, which comes with triple tax advantages (contribute pre-tax, pay no tax on gains, and pay no tax on usage).

by dpweb 11y ago

pmorici 11y ago

My current plan has an has an HSA component but the company that administrates the account, BenefitWallet, has some fine print in the account agreement that they charge an account fee for balances less than several thousand dollars. Realistically I only spend several hundred dollars per year on healthcare stuff so I don't think it is to my advantage to lock up that much money in a non-interest bearing account or pay the bank 120 bucks per year.

mecameron 11y ago
You are not required to use the HSA provider that your insurer/employer is tied to. You can pick and contribute to your own HSA account elsewhere, with one caveat. Your contributions are deductible from federal and most state taxes, but are only deductible from payroll taxes (social security/medicare) if the HSA contribution is deducted from your paycheck by your employer (and thus deposited in their preferred HSA provider).
- pmorici 11y ago
  Yeah, in my case it isn't though my employer either so there is another reason to avoid it.
dpweb 11y ago
I called the bank and they stopped charging me their HSA monthly fee, and credited back the past months fees - FYI. I won't say which bank it was, but it rhymes with Smells Smargo!
- abawany 11y ago
  I opened an HSA with my credit union (First Tech Federal). It has no monthly fees and even pays 1% interest, which is tax free as well.
brewdad 11y ago
One advantage to consider is that there is no time limit on when you spend the money. As you age, your health care costs will rise. How much interest are you really making on $5000 in today's environment? $50? $100? Meanwhile, you save your marginal tax rate on any dollars contributed towards future medical expenses. That's a pretty good return on your money. $5000 at 28% marginal rate knocks $1400 off your tax bill.
- pmorici 11y ago
  ~7% ($350)
okbake 11y ago
I'm pretty sure that with HSAs you're not tied to a particular administrator. I think that you can get one from any administrator you want. If it's through an employer then they might only do direct paycheck deposits to a particular administrator, but you're able to opt-out of that and do the deposit yourself. Don't listen to me though, I could be wrong, but it's worth looking into if you're considering an HSA.
xirdstl 11y ago
As others have said, I think you can use another company. Also, some companies will allow you to invest any money above a certain balance. In my HSA, I can invest anything about $2000 (or maybe $2500?) into a number of different mutual funds. That plus tax benefits plus tax free growth is a pretty good deal.
rsync 11y ago
Just contact your bank and open an HSA account with them - they'll fall all over themselves to help you do it. It will be interest bearing and you can tie it to bill-pay and issue mailed checks directly out of it. It's great. Also, you can leave unused HSA funds in the account and let them grow, tax free, for future medical needs.[1] [1] https://www.irahelp.com/slottreport/how-you-can-utilize-hsa-now-save-retirement https://www.irahelp.com/slottreport/how-you-can-utilize-hsa-...
spiralpolitik 11y ago
Look for a HSA that is backed by a money market account. If you are young and healthy then a HSA based plan makes sense as you can put money away until you needed it. Better than paying premiums you never use. If you start paying it at 20 then you are looking at decent amount later in life assuming the stock market delivers. If you have ongoing healthcare costs then the math becomes a wash and usually sticking with a PPO type plan is the way to go. Looking longer term I can see the HSA becoming the norm and employers will pay into that rather than offering insurance plans. At this point the exchanges should become competitive enough to drive costs down if everything happens through the exchange.

dplgk 11y ago

It seems like you're saying you can write off any medical expenses which doesn't seem to be true according to the internet > The IRS allows you to deduct qualified medical expenses that exceed 10% of your adjusted gross income for the year.

chimeracoder 11y ago
> It seems like you're saying you can write off any medical expenses which doesn't seem to be true according to the internet He's referring to an HSA, which comes with triple tax advantages (contribute pre-tax, pay no tax on gains, and pay no tax on usage).