...Ned Flanders on the Simpsons considered insurance "a form of gambling"!
We just got info on our healthcare options at work. It ain't good--they're getting rid of the plan I'm currently on, and I can either get on another high-deductible plan with a Health Savings Account (HSA) instead of a Flex Spending Account (FSA), or I can go to a high-monthly-premium, low-deductible plan that still has an FSA attached.
Well, I hate flex spending--last year I had a bunch left over and ended up getting designer sunglasses; this year my doctor prescribed some lab tests right away, and I blew through my flex money in January and have been paying with post-tax dollars ever since. So you'd think the HSA would be the obvious choice. I can carry over what I don't use, it's tax-free--it's much better than FSA in a lot of ways.
BUT--I'd love to have tax-free savings for whatever comes up, and the max you can contribute is $3000--coincidentally your out-of-pocket maximum for the year. However, that maximum doesn't factor in teeth and eyes--and with the dental stuff I had done this year, I'd love to have enough HSA money to cover worst-case scenario PLUS dental worst-case PLUS vision worst-case. But I can't.
Oh well. If I went with the low-deductible plan and kept my FSA at its current, my paycheck's going down $80 either way. I guess HSA is better.
Now I know why...
October 21st, 2008 at 04:47 pm
October 21st, 2008 at 05:00 pm 1224608428
October 21st, 2008 at 07:05 pm 1224615935
Plus, the gov't has consistently increased the amount you can put in and most of the HSAs have good investment options so you can usually get 3-5% once you have more than the minimum in there.
I think the biggest secret is not use the HSA unless you really have to. Currently, you can reimburse your self any time for past expenses. So I when I had a root canal done this year I used the HSA to pay for the main procedure ($1K) but not the prescriptions ($100) or followups ($250). While it would be nice to have the $350, I'd rather let it sit there and appreciate. And if next spring I need some cash, I can legally take that amount out and use it for whatever needs paying.
HSAs are not perfect by any means, but I do think they are much better than FSAs. And I think over time you may actually end up liking yours a lot.
October 21st, 2008 at 07:52 pm 1224618774