Health Savings Account rant

[alkemyst]

Not quite that simple. They wait 3-4 months before informing you which receipts they are disputing. Most normal people don't save every receipt they get - resulting in a trip back to the pharmacy while they print out all your VISA receipts.

I know you're not dense, and I know you understand what a fucking headache it is to keep chasing receipts. We've stopped using the FSA for exactly that reason: our time is far more valuable than the $200 the FSA saves us in taxes each year.

Wow, my pharmacy and medical claims show right up under my Cigna portal. I think select the items I want to print, print them to a PDF and then open my FSA (Flores) portal and upload the PDF and type in which claims and amounts I want reimbursed.

I usually have the money by that Friday.

It's insane they are disputing Pharmacy items or are you doing mostly OTC stuff.

 

[alkemyst]

My employer gives us $800/yr and it rolls over for HSA - nothing req'd from me including monthly fees, for so-so coverage, and $5650 out of pocket max. I'm still deciding whether this is worthwhile given my other option of paying $875/yr + co-pays but 100% covered for everything else. Basically a $1k out of pocket max, but guaranteed to spend $875.

How easy is it to submit a claim to have your HSA pay? It says I should wait for explanation of benefits, then submit the payment - can I do that with the HSA debit card? Is there some paperwork involved if you can't do it through the debit card?

If you use the Debit Card it's automatic.

If you don't (we don't get a debit anymore), then you need your EOB to send in or upload.

 

[edro]

How easy is it to submit a claim to have your HSA pay? It says I should wait for explanation of benefits, then submit the payment - can I do that with the HSA debit card? Is there some paperwork involved if you can't do it through the debit card?

I don't think the IRS gets notified of claims.
They just take your word for it that they were medical expenses.

My HSA had a debit card or you could reimburse yourself and make a transfer to your bank account. Pay with credit card or whatever.

If you ever got audited, you would need receipts to show your withdrawals were for medical expenses.

 

[alkemyst]

I don't think the IRS gets notified of claims.
They just take your word for it that they were medical expenses.

My HSA had a debit card or you could reimburse yourself and make a transfer to your bank account. Pay with credit card or whatever.

If you ever got audited, you would need receipts to show your withdrawals were for medical expenses.

QFT, IRS has nothing to do with this. Your employer is verifying it's health money and your F/HSA manager is verifying the expenses were approved items/procedures.

There really should never be an audit for F/HSA monies with that in place.

Much like EOB's your F/HSA manager gets statements with details on the items. Most pharmacies code F/HSA items based on each year's rules.

Usually the problems are someone buying non-approved items and trying to argue it with their managers that they should be covered.

I have a lot of flexible spending and it's easy.

 

[dullard]

How easy is it to submit a claim to have your HSA pay? It says I should wait for explanation of benefits, then submit the payment - can I do that with the HSA debit card? Is there some paperwork involved if you can't do it through the debit card?

If you do consider going the HSA route, I would strongly urge you to NOT submit claims to have your HSA pay. You'd be missing out on some of the best HSA advantages.

Suppose you go to the doctor and get a $100 bill. And suppose in 40 years time you have a $1500 medical bill for a colonoscopy. You could use your HSA to pay that $100 bill directly (with a debit card or with checks depending on your HSA provider), or to reimburse you if you chose to pay with a different method. But that wouldn't be the wisest move. You still have that looming $1500 bill coming in your future. Sure you'll have $100 more right now. But in 40 years you'll have nothing and will have to fork over that $1500.00. Plus, you'll be that much closer to probably having to pay ~$3 in HSA fees every month for having a low HSA balance (the whole point of this thread).

Instead, you could invest that $100 within your HSA. In the next 40 years, it would be worth on average $1631.14. If you use that $1631 for medical expenses (and who doesn't have medical expenses when they age), it is fully tax free. Assuming a 25% federal and 7% state tax bracket, that saves you $521.96 in taxes ($32 on the $100 you put in the HSA and $489.96 saved on the earnings). That colonoscopy would be covered without you putting in another dime.

You lose $100 now, but you gain a free $1500 coloscopy in the future, save $1440 on HSA fees by avoiding a likely $3/month low HSA balance fee for those 40 years, and save $489.96 on taxes over that 20 years. And you'll still have $131.14 left over to withdraw any time you wish.

All that for a $100 doctor fee. Now imagine the gains and savings by putting $6500 in it each year and not reimbursing yourself from it. Hint: You'll have $1,482,758 in 40 years assuming you get a typical 7% return on your investments.

There just is no better legal way of saving money at the moment in the US than to leave as much money as you can in the HSA and then invest that into stocks. So don't reimburse yourself from your HSA for medical expenses. Think of it as the single best retirement plan possible, combined with decent but not great health insurance.

 

[alkemyst]

If you do consider going the HSA route, I would strongly urge you to NOT submit claims to have your HSA pay. You'd be missing out on some of the best HSA advantages.

Suppose you go to the doctor and get a $100 bill. And suppose in 40 years time you have a $1500 medical bill for a colonoscopy. You could use your HSA to pay that $100 bill directly (with a debit card or with checks depending on your HSA provider), or to reimburse you if you chose to pay with a different method. But that wouldn't be the wisest move. You still have that looming $1500 bill coming in your future. Sure you'll have $100 more right now. But in 40 years you'll have nothing and will have to fork over that $1500.00. Plus, you'll be that much closer to probably having to pay ~$3 in HSA fees every month for having a low HSA balance (the whole point of this thread).

Instead, you could invest that $100 within your HSA. In the next 40 years, it would be worth on average $1631.14. If you use that $1631 for medical expenses (and who doesn't have medical expenses when they age), it is fully tax free. Assuming a 25% federal and 7% state tax bracket, that saves you $521.96 in taxes ($32 on the $100 you put in the HSA and $489.96 saved on the earnings). That colonoscopy would be covered without you putting in another dime.

You lose $100 now, but you gain a free $1500 coloscopy in the future, save $1440 on HSA fees by avoiding a likely $3/month low HSA balance fee for those 40 years, and save $489.96 on taxes over that 20 years. And you'll still have $131.14 left over to withdraw any time you wish.

All that for a $100 doctor fee. Now imagine the gains and savings by putting $6500 in it each year and not reimbursing yourself from it. Hint: You'll have $1,482,758 in 40 years assuming you get a typical 7% return on your investments.

There just is no better legal way of saving money at the moment in the US than to leave as much money as you can in the HSA and then invest that into stocks. So don't reimburse yourself from your HSA for medical expenses. Think of it as the single best retirement plan possible, combined with decent but not great health insurance.

Paying in present money now versus future money that's worth less technically has to be weighed in.

Most that have HSA/FSA need them for current expenses. Roth/401k investments would be a smarter approach if you have not maxed those.

 

[xeemzor]

Paying in present money now versus future money that's worth less technically has to be weighed in.

Most that have HSA/FSA need them for current expenses. Roth/401k investments would be a smarter approach if you have not maxed those.

This is incorrect. For most people it's better to max out an HSA before an IRA or 401k regardless of medical need.

 

[dullard]

This is incorrect. For most people it's better to max out an HSA before an IRA or 401k regardless of medical need.

Xeemzor is correct.

The mathematically best order for investments is this:
1) Do just enough to get your company's 401k match (or similar).
2) Max out the HSA.
3) Usually max out the Roth IRA if you qualify or IRA if not (maxing the HSA makes it easier to qualify).
4) Max out the 401k (or similar).
5) Post-tax investments.
Note: sometimes swap #3 and #4 if you are in an unusual situation.

I could do the math of HSA vs post-tax investment that was mentioned. But, tell me what return to assume, what tax bracket (state and federal), time frame, and how much of the post-tax return is long-term vs short-term gains.

 

[Pulsar]

Wow, my pharmacy and medical claims show right up under my Cigna portal. I think select the items I want to print, print them to a PDF and then open my FSA (Flores) portal and upload the PDF and type in which claims and amounts I want reimbursed.

I usually have the money by that Friday.

It's insane they are disputing Pharmacy items or are you doing mostly OTC stuff.

All Pharmacy stuff, with prescriptions. It's intentional and planned on their part - it was always the bigger stuff, usually the 3 month prescriptions of maintenance medication. So they'd challenge the biggest dollar items and hope you either didn't notice or were too lazy. They make it purposefully inconvenient.

 

[rh71]

*nvm* found the answers in FAQ

 

[JM Aggie08]

I doubt it's really all that different, depending on which specific area you choose to live in.

KT

Texas.

Gtfo.

 

[dud]

My old employer had High Deductible Health Plan, so they had us set up Health Savings Accounts.
I have $2000 in there, but no longer work for that employer.
I just checked my account and they have been charging me a $3/mo service fee.
They charge $3/mo for balances under $5000!

Since my new employer has regular health insurance, it's not considered a HDHP, so I am not eligible to contribute to a Health Savings Account anymore.

So I am basically forced to use the money on medical expenses (I have none), let it sit and incur $3/mo fee, or withdraw it and take a 20% hit.

</firstworldproblems>

You actually have health insurance???

Do you know how many cannot even afford Obamacare?

How many people do you know that are uninsured?


Yes, perhaps it is a problem ... but a 1st world problem ...

 

[highland145]

You actually have health insurance???

Do you know how many cannot even afford Obamacare?

How many people do you know that are uninsured?


Yes, perhaps it is a problem ... but a 1st world problem ...

My new 2015 rate is $618/mo, $10K deductible. If only I were a 1%-er.

 

[lupi]

got screwed by our wonderful new insurance rules again this year. last of the non-crappy plans bailed from our area, and almost everything left was HDHP or CDHP junk. much prefer the nice high coverage ones where you know you pay higher a month but anything you need is just a simple copayment.

 

[edro]

You actually have health insurance???

Do you know how many cannot even afford Obamacare?
How many people do you know that are uninsured?
Yes, perhaps it is a problem ... but a 1st world problem ...

Really? You're trying to guilt trip me?

You're a moron.

What are you even doing on here? You should be in Africa fighting ebola.

 

[Nashemon]

*SNIP*
All that for a $100 doctor fee. Now imagine the gains and savings by putting $6500 in it each year and not reimbursing yourself from it. Hint: You'll have $1,482,758 in 40 years assuming you get a typical 7% return on your investments.

Am I missing something? Can't you only spend HSA money on medical bills? I thought that was the whole point. The reason it's tax free. Does an average person have nearly $1.5 million in medical expenditures in their lifetime?

There just is no better legal way of saving money at the moment in the US than to leave as much money as you can in the HSA and then invest that into stocks. So don't reimburse yourself from your HSA for medical expenses. Think of it as the single best retirement plan possible, combined with decent but not great health insurance.

Wait, what? You're spending HSA money on stocks? Again, am I missing something? Isn't that fraud? Is millionaire grampa going to jail?

 

[tynopik]

Am I missing something? Can't you only spend HSA money on medical bills? I thought that was the whole point. The reason it's tax free. Does an average person have nearly $1.5 million in medical expenditures in their lifetime?

you can withdraw penalty free from an HSA after age 65

Wait, what? You're spending HSA money on stocks? Again, am I missing something? Isn't that fraud? Is millionaire grampa going to jail?

it's not spending, it's investing

when you put your 401k money in an index fund are you 'spending' it? NO. Same thing here

the stocks stay within your HSA

 

[rh71]

Am I missing something? Can't you only spend HSA money on medical bills? I thought that was the whole point. The reason it's tax free. Does an average person have nearly $1.5 million in medical expenditures in their lifetime?



Wait, what? You're spending HSA money on stocks? Again, am I missing something? Isn't that fraud? Is millionaire grampa going to jail?

I was heavily considering this and looked into it. My HSA account would've allowed me to put it into investments (whatevers not being used) and I can cash out after I retire (taxed at a lower rate than now).

In the end I decided my risk is too great now (spleenless and active in contact sports) that I shouldn't be paying my potential medical bills out of pocket like this (especially with $5k deductibles) in the name of having it grow into future money. I'll just have to sit ok with my 401k and maybe try a Roth IRA.

Thanks for the info anyway, dullard. BTW, the minimum for an HSA account for me before a low balance fee was $only 12.

 

[Newell Steamer]

#1, I never deal with HSA. I can understand their benefit, when there is a high number of medical expenses (new born with medical problems, monthly treatments of condition X). But, for the most part, I just avoid them.

#2,

So I am basically forced to use the money on medical expenses (I have none), let it sit and incur $3/mo fee, or withdraw it and take a 20% hit.

This is how they have always worked - you either spend it all, or you lose it in some manner,.. which is why I avoid them.

 

[TuxDave]

you can rollover to a better provider without paying the 20% fee. there's a big HSA thread on that wallet place with some that even pay interest

God I wish I knew this

 

[IronWing]

Am I missing something? Can't you only spend HSA money on medical bills? I thought that was the whole point. The reason it's tax free. Does an average person have nearly $1.5 million in medical expenditures in their lifetime?



Wait, what? You're spending HSA money on stocks? Again, am I missing something? Isn't that fraud? Is millionaire grampa going to jail?

One other advantage of HSAs is that you don't have to reimburse yourself for medical expenses in the year they are incurred so you can allow the amount you "owe" yourself to build up, tax free. If, down the road, you need the money for something (medical or not) you can reimburse yourself for that backlog of un-reimbursed medical expenses. Just keep good records and save the receipts.

 

[tynopik]

This is how they have always worked - you either spend it all, or you lose it in some manner,.. which is why I avoid them.

you have a sucky HSA provider, there are better ones out there

 

[edro]

#1, I never deal with HSA. I can understand their benefit, when there is a high number of medical expenses (new born with medical problems, monthly treatments of condition X). But, for the most part, I just avoid them.

#2,

This is how they have always worked - you either spend it all, or you lose it in some manner,.. which is why I avoid them.

Wrong.
You are thinking about FSAs, not HSAs.

HSA = Health Savings Account
FSA = Flex Spending Account

FSAs are Use it or Lose it at end of the year.

HSAs are tax sheltered and never expire. Most providers have a yearly fee on the account, which your employer usually pays, so it's free to you.
In my case, I left the employer, so the account provider now charges a monthly fee for the account.

I have since moved the funds to a fee-free provider. (Huntington bank, fee free for the Ohio and surrounding states area)

 

[s0me0nesmind1]

2 Things:

I could have sworn you could only roll over an HSA ONE time in a lifetime (according to IRS rules). Correct me if I'm wrong here.

Also, Is it possible to contribute to my HSA with already taxed money? As in, contribute to my HSA with dollars that were already taxed from my paycheck and then claim them on my tax return?

 

[amdhunter]

I would go and get every checkup I needed for years.

Yeah - now is a good time to go ahead and get things you never thought of checked out at a specialist.

I have no heart issues but had it checked out for the hell of it just last week. If you have insurance, use it, if only for piece of mind.