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Old 04-18-2019, 08:40 AM
 
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The high deductible plan ($4000 for the family) is new to me....i've had it for a year now, when i started with this new job, chosen since it made financial sense for our relatively healthy household.
i'm diverting the max to the HSA account, and in the past 12 months since i've been at this job, it's grown to a nice healthy $8,000 balance. I don't use the funds to pay for doc visits....but instead just invest it and let it grow tax free.

I wanted to get your thoughts on strategies to use the HD plan and the HSA more efficiently. Are you doing anything else that you thing give you an edge financially? I'd love to get your take on it.
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Old 04-18-2019, 08:42 AM
 
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I personally don't use the HSA as a savings vehicle at this point in time. I withhold enough in my HSA to cover my annual deductible. If there is some leftover at the end of the year, great! If not, oh well. I also have young school-aged children, so we tend to have a lot of doctor visits!
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Old 04-18-2019, 09:16 AM
 
Location: Censorshipville...
2,711 posts, read 6,265,139 times
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Quote:
Originally Posted by Thinking-man View Post
The high deductible plan ($4000 for the family) is new to me....i've had it for a year now, when i started with this new job, chosen since it made financial sense for our relatively healthy household.
i'm diverting the max to the HSA account, and in the past 12 months since i've been at this job, it's grown to a nice healthy $8,000 balance. I don't use the funds to pay for doc visits....but instead just invest it and let it grow tax free.

I wanted to get your thoughts on strategies to use the HD plan and the HSA more efficiently. Are you doing anything else that you thing give you an edge financially? I'd love to get your take on it.
When I had a HDHP w/ HSA, I was doing what you are describing. Our HSA just sits since we can't contribute to it anymore since we've switched, but it is still growing.

We're in the growing family stage so I've switched to a conventional plan until we stop having kids and the extra doctor visits. We've recently switched to a CDHP and so far that seems to be working for us. They pre-fund a Healthcare Reimbursement Account (HRA), up to 2500 a year for our family. Once that is exhausted, then it works like a HDHP where you have to meet your deductible before it works like regular insurance. If you don't exhaust your HRA, it rolls over. So the longer you're in it, the HRA grows and grows. Unfortunately once you leave the plan, the HRA goes away unlike an HSA where it's yours forever. HRA is nice, as it's pre-funded the beginning of the year by the healthplan, unlike my HSA where I had to fund it myself.

One thing that you can do is keep a copy of all medical receipts that you pay out of pocket for. When you pull money out of HSA, they can be tax free even if you use it for non medical uses, if you offset it with medical receipts that you paid with after tax funds.

If your company provides one, look at a Flexible Spending Account (FSA). It's works like an HSA, but you can only rollover up to $500 a year versus an HSA which is infinite. It's tax deductible as well, but the yearly contributions are lower. I use an FSA to pay for medical costs through the year and let the HSA just grow.
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Old 04-18-2019, 09:31 AM
 
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Originally Posted by oneasterisk View Post
When I had a HDHP w/ HSA, I was doing what you are describing. Our HSA just sits since we can't contribute to it anymore since we've switched, but it is still growing.

We're in the growing family stage so I've switched to a conventional plan until we stop having kids and the extra doctor visits. We've recently switched to a CDHP and so far that seems to be working for us. They pre-fund a Healthcare Reimbursement Account (HRA), up to 2500 a year for our family. Once that is exhausted, then it works like a HDHP where you have to meet your deductible before it works like regular insurance. If you don't exhaust your HRA, it rolls over. So the longer you're in it, the HRA grows and grows. Unfortunately once you leave the plan, the HRA goes away unlike an HSA where it's yours forever. HRA is nice, as it's pre-funded the beginning of the year by the healthplan, unlike my HSA where I had to fund it myself.

One thing that you can do is keep a copy of all medical receipts that you pay out of pocket for. When you pull money out of HSA, they can be tax free even if you use it for non medical uses, if you offset it with medical receipts that you paid with after tax funds.

If your company provides one, look at a Flexible Spending Account (FSA). It's works like an HSA, but you can only rollover up to $500 a year versus an HSA which is infinite. It's tax deductible as well, but the yearly contributions are lower. I use an FSA to pay for medical costs through the year and let the HSA just grow.
Thank you.
Yes, we have a FSA but you can't contribute to both a FSA and a HSA simultaneously.
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Old 04-18-2019, 09:38 AM
 
Location: Censorshipville...
2,711 posts, read 6,265,139 times
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Originally Posted by Thinking-man View Post
Thank you.
Yes, we have a FSA but you can't contribute to both a FSA and a HSA simultaneously.
You can if enrolled in a Limited Expense Health Care FSA
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Old 04-18-2019, 10:02 AM
 
Location: Austin, Texas
1,553 posts, read 917,962 times
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Originally Posted by clawsondude View Post
I personally don't use the HSA as a savings vehicle at this point in time. I withhold enough in my HSA to cover my annual deductible. If there is some leftover at the end of the year, great! If not, oh well. I also have young school-aged children, so we tend to have a lot of doctor visits!
I can't imagine not loading up an HSA. The money goes in pre-taxed, grows tax free, and is not taxed at withdrawal if used on qualifying medical expenses, which are pretty much guaranteed if we live long enough.

There's really no better vehicle out there for keeping your earnings free from the IRS.
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Old 04-18-2019, 10:34 AM
 
18,857 posts, read 13,611,388 times
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Quote:
Originally Posted by Thinking-man View Post
Thank you.
Yes, we have a FSA but you can't contribute to both a FSA and a HSA simultaneously.
Quote:
Originally Posted by oneasterisk View Post
You can if enrolled in a Limited Expense Health Care FSA
Onessterik is correct. A strategy with the HSA thatís rather simple, keep every receipt for medical expenses for you and your family for ever, let the HSA grow as long as you can and then ultimately say in retirement you can withdrawal large chunks tax free for all the accumulated expenses youíve had over decades
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Old 04-18-2019, 11:05 AM
 
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Originally Posted by unihills View Post
I can't imagine not loading up an HSA. The money goes in pre-taxed, grows tax free, and is not taxed at withdrawal if used on qualifying medical expenses, which are pretty much guaranteed if we live long enough.

There's really no better vehicle out there for keeping your earnings free from the IRS.
I don't have the earning power at this point to max out other savings vehicles like my 401k. If I were going to up anything at this point it would be that. I also contribute to 529 plans for my kids. It's all about priorities.
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Old 04-18-2019, 11:13 AM
 
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Originally Posted by clawsondude View Post
I don't have the earning power at this point to max out other savings vehicles like my 401k. If I were going to up anything at this point it would be that. I also contribute to 529 plans for my kids. It's all about priorities.
True. Im with you. Im maxing out the 401k and iras and i think we have enough in 529 plans for our 3 kids, since they still have about 12 years befor college.
So the HSA makes good sense for us.
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Old 04-18-2019, 11:56 AM
 
18,857 posts, read 13,611,388 times
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Originally Posted by clawsondude View Post
I don't have the earning power at this point to max out other savings vehicles like my 401k. If I were going to up anything at this point it would be that. I also contribute to 529 plans for my kids. It's all about priorities.
Maxing the HSA as soon as youíve gotten the 401k match taken care of is probably the best move as you could somewhat easily never pay tax on the HSA money and still receive the upfront tax reduction as you make the contributions
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