Non PARF, but "O" cut your SS payments for 2 years by 2%-What to do?

[Hugh R]

OK, a little PARFy, BUT again I put it out primarily to discuss what to do with the money. An HSA is an idea that I hadn't thought about, for example.

[Porsche-O-Phile]

I'm not sure if it's all HSAs now, but the one my current employer offers is "use it or lose it" on a yearly basis. A few years ago (2004/2005, whenever they came out) you could pay into them and there was no requirement to use or lose by the end of the year, it just rolled over.

I'm not sure if this is a change in the rules or not, but the "new" HSA sucks (IMHO). I still have my HSA from my old employer with no such provision that has some money in it should I ever need it (rolls over from year to year, not sure if I can add to it still).

Something to consider though - if you over-estimate your yearly expenses you could end up spending next year's holiday season running around to Dr's offices trying to burn through your allottment, which doesn't sound like a particularly fun or productive way to spend the holidays...

Needless to say, I don't bother with the current HSA (the one with the "use or lose" provision), not worth the (potential) hassle, IMHO.

If you can get one without the "use or lose" stipulation (if that's possible) I'd say it's as good a place as any to stash money tax-free.

[JR Indy]

Don't confuse HSA with FSA. With HSAs you don't have to spend the money in the same year, that is an FSA that you are thinking about. The money in the HSA is yours for medical expenses and your deposits are pre-tax. There are penalties for early withdraw before age 65. We added a high deductible with HSA plan at work this year and provided a company paid monthly HSA deposit. It is even an interest bearing account. You have to be enrolled in a high deductible insurance plan though.

[Rick Lee]

I think HSA's are for people who don't get full benefits. FSA (flexible) are for those with full benefits. I put $600 a year into mine and have $5 leftover right now. I think the limit is $5000. HSA has totally different rules.

[dmcummins]

Another give away that I won't be getting.

[JR Indy]

Originally Posted by Rick Lee

I think HSA's are for people who don't get full benefits. FSA (flexible) are for those with full benefits. I put $600 a year into mine and have $5 leftover right now. I think the limit is $5000. HSA has totally different rules.

I'm no expert on this, but HSA are used in conjunction with a high deductible health insurance plan. For me, this was hands down the best option available, and many of our employees at work agreed. If by benefits you mean co pays and deductibles, then yes there is a difference. With low deductible plans, you are doing nothing more than paying your deductions and co-pays up front -- even if you never use it. With high deductible, the premiums are MUCH cheaper and you pay higher co-pays as needed, but you can use your HSA for those payments. So, it depends on your situation. Sorry, a bit off topic.

On topic, an HSA is another pre-tax option to consider.

[red-beard]

Originally Posted by JR Indy

I'm no expert on this, but HSA are used in conjunction with a high deductible health insurance plan. For me, this was hands down the best option available, and many of our employees at work agreed. If by benefits you mean co pays and deductibles, then yes there is a difference. With low deductible plans, you are doing nothing more than paying your deductions and co-pays up front -- even if you never use it. With high deductible, the premiums are MUCH cheaper and you pay higher co-pays as needed, but you can use your HSA for those payments. So, it depends on your situation. Sorry, a bit off topic.

On topic, an HSA is another pre-tax option to consider.

This is precisely correct. The HSA combined with a high deductible plan is the least expensive way to get fully covered. You build up money in the HSA and then use that for medical expenses up to the yearly deductible. Beyond the deductible, the main plan comes in.

The cost for my High deductible plan is now $283/yr for myself and my wife, with a $5000 deductible and $8000 maximum yearly outlay. IF I max out in a year, I pay $283*12+$8000=11396

Using the number from my old plan with the same increase from 2008, the plan would be $1000/mth. The deductible is $2000 ($1K each), and has all sorts of copays ($50-75 for a doctor vist, $150 for ER and $250 for Hospital stay). Without the co-pays, if I max out it would cost me $1000*12+2000=$14000.

So the 1st plan saves about $2500 IF you max out. What if you don't use the plan?

$3396 vs $12000, or over $8500 in savings!!!

So tell me again, which one makes more sense?

[strupgolf]

My HSA plan is paid for by my employer, single coverage, wife has her own. I have a $3000 deductible. I maxed out my deductible by June this year, so everything is paid for until Dec. 31. I hope I dont have a heart attack, but if I do, it's covered 100%. I just might increase my contribution soom too, only to see EVERYTHING else go up. It's all Bush's fault--oh oh, what did I say?

[RWebb]

be sure to check on any recent changes to ... whatever acronym you use

IIRC, I saw a news article on some changes recently.

[UconnTim97]

Thanks for the reminder. I am going to increase my contribution to my deffered compensation plan (read government version of a 401k), which takes weeks to actually process the change.

[JR Indy]

Originally Posted by RWebb

be sure to check on any recent changes to ... whatever acronym you use

IIRC, I saw a news article on some changes recently.

Again, HSA and FSA are completely different. For HSA, no changes for 2011, except vitamins and supplements are not eligible this year. Again, I'm no expert on this, so research on your own.

[campbellcj]

I got forced out of my HSA with a 60% premium increase a few months ago.

I confess to not following the news as closely as I should have. I was aware that the tax hikes were suspended (I find that more palatable than saying tax cuts were extended) but didn't know about a FICA cut.

I would prefer to see SS phased-out completely but I guess this is a step in the right direction. I'll find something constructive to do with the money. Race tires?!?!?