Demystifing HSA's for Indianapolis

Monday, April 13, 2009 by Andre Arnold

I worked for Radio Shack prior to moving into financial services and they had this tagline of "Demystifing Technology" for obvious reasons the term never caught on but their intent was sound. They wanted to take the mystery and F.U.D. (fear uncertainty and doubt) out of consumer electronics. In the process of using a very bad tagline, Radio Shack sold a lot of cellphones, home audio and more. I feel there is a lot of F.U.D. when it comes to health care options. especially High Deductible Health Plans (HDHP) and associated Health savings Accounts (HSA). So let's try to demystify HDHP and HSA's (wow..just looking at that last sentence strikes some FUD)

I have the pleasure of working with HDHP and medical savings accounts as part of my role with FCFCU. When companies are rolling out HSA's as a new insurance option, I have a front seat in the process and because I get to peek behind the curtain I understand the "why" behind HDHP more than most outside of insurance or human resources. One thing I am sure of concerning High Deductible Health Plans and Health Savings Accounts is if our country ever makes a serious attempt to "fix" our national healthcare issue, it will likely come in the form of HSA's.

So, what do you think? Are you concerned that healthcare cost are almost 10k per employee? Do you have questions about HDHP's and how they work? Would you like sites where you can find additional information? Or would you just like to talk about your healthcare experience, good or bad?

I will share my experiences with health savings accounts as well as financial education surrounding insurance brokers, healthcare providers and more. Ask a question or post a comment. We'll explore together.  

Comments for Demystifing HSA's for Indianapolis

Tuesday, April 28, 2009 by Thomas Ho:
When I pay for medical expenses with my HSA, are those medical expenses deductible on Schedule A of my federal income tax return?
Tuesday, April 28, 2009 by Andre M Arnold:
Thomas, first I must tell you to see a tax specialist before taking action on my reply to your question. I am not a tax specialist and am not qualified to answer tax questions. However, the answer is "no" if you are using pretax dollars in your HSA. You did not pay taxes on those dollars! If you are paying for qualified medical expenses from your regular taxed income and you have a HDHP then you may reimburse yourself (or not) from your HSA, keep copies of your receipts and submit these to your tax specialist so he or she may make the adjustments. For further tax details go to www.ustreas.gov/offices/public-affairs/hsa/ Hope this helps!
Tuesday, May 5, 2009 by Ben Caudell:
What happens if I am short on cash and I use HSA funds to pay for something other than qualified medical expenses?
Tuesday, May 5, 2009 by Andre Arnold:
Ben, as always, I must advise that I am not a tax specialist. If your Health Savings Account is not used for qualified medical expenses, an HSA becomes much like an IRA. Using it for non-qualifed medical expenses will mean you will be subject to applicable income taxes, plus, if you are under age 65, an additional excise tax pentaly of 10%. It is not a wise decision to misuse your HSA funds. Keep your HSA questions coming Indianapolis.
Wednesday, May 6, 2009 by Bridgetta Bullock:
This may be a stupid question, but what is a High Deductible Health Plan (HDHP)?
Friday, May 8, 2009 by Andre Arnold:
A High Deductible Health Plan (HDHP) is a health insurance plan that usually has lower premiums but higher deductibles than traditional health plans. HDHP's 2009 annual deductibles for individual coverage must be at least $1,150 but not not exceeding $5,800 for out-of-pocket expenses (deductibles, co-payments and other amounts, but not premiums) Family must be at least $2,300 but not exceeding $11,600. HDHP qualifying deductibles and annual out-of-pocket-expenses are indexed for inflation on an annual basis. Health Savings Accounts (HSA) allows pre-tax and post tax contribution to cover out of pocket expenses. HSA's cannot be established without a HDHP. HDHP's promote more consumer risk and reward by giving the consumer more control over their healthcare spending. The expected future benefits of HDHP's are decreasing medical cost and increased transparency as medical companies compete for those dollars. For more info visit www.treas.gov

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