MM201: the case for HSAs as a retirement vehicle

[sometimesrunner]

I love our HSA. When I first graduated and it was my only option I was all WTF?!? but I've grown to love it. Thanks to everyone here, I have about 75% of my account invested in a Vanguard ETF. Grow, baby, grow!!!

[hamster]

We have talked about taking H off his company insurance and putting him on mine so we can do the HSA. Right now I'm not eligible because he does an FSA and the IRS frowns upon doing both.

[bostonmichelle]

We switched to the high deductible HSA option this year at DH's work. I love it. I'm spending less on my out of pocket stuff than I did previously and we have a bit of money growing.

[monsterz]

I just started researching these as I think that is the route we are going with the new job. It sounds silly to not max out the contributions. My employer even provides a small match to the contributions.

My H can no longer contribute to his FSA but the HSA allows us to save more so that's not an issue.

[Mimi]

I looked into it 2yrs ago but it wasn't the best choice at the time. My traditional health insurance was just a lot better when it comes to having babies. I only had to pay $250 for hospital co-pay, $0 prenatal visits co-pay. But since I'm done with babies, I should review it again this year and see if it now makes sense.

[arch01]

I hold out hope that my employer will offer a HSA option every year, and every year I end up disappointed. I loved mine at my previous job.

[cjeanette]

Glad you posted this! I have been a huge fan of HSAs for years and I think they are underutilized

[abramos]

Flexible spending accounts are no longer strictly "use it or lose it" as they were in the past; before the IRS changed the rules in late 2013, FSA funds not used by year-end would be forfeited. But FSA-account owners can only roll over $500 of their unused balances from one year to the next.

Wow! I did not know you can roll over up to $500 on our FSA. Almost every year, DH and I scramble around the end of the year to try to spend the money we have not used up.

I am not sure how I can let my company know about this.

[flygirl22]

Hm, this is all very interesting to me. I wonder if I should consider this. My company offers this, and they contribute $1200 for a family. The cost is unknown for next year, this year, this option was $60/month cheaper than the other medical option. I'm sure it will be a bigger cost for other insurance next year so it will be a bit bigger incentive. My plan is to have a baby in 2016.. not sure if I should consider that in my 2015 insurance plans..

[Deleted]

Aug 22, 2014 13:53:14 GMT -5 abramos said:

Flexible spending accounts are no longer strictly "use it or lose it" as they were in the past; before the IRS changed the rules in late 2013, FSA funds not used by year-end would be forfeited. But FSA-account owners can only roll over $500 of their unused balances from one year to the next.

Wow! I did not know you can roll over up to $500 on our FSA. Almost every year, DH and I scramble around the end of the year to try to spend the money we have not used up.

I am not sure how I can let my company know about this.

This is new as of either this year or was a late development for reimbursements for 2013. The plan administrator should be informing your employer. Also I believe your employer has to opt-in to the rollover vs. the grace period.

www.irs.gov/pub/irs-drop/n-13-71.pdf

[Deleted]

I only skimmed the article as HSAs are something I know a bit about, but the tax benefits are even better for HCEs who typically have restrictions on other plans like 401ks without a safe harbor and FSAs, and those who are phased out of Roth contributions and don't want to do conversions due to high(er) tIRA balances.

[delawarejen]

Thanks for the info! In my case my employer doesn't offer any high-deductible health plans (they used to, but I don't think enough people were using them).

[Pom]

Thanks for this info. Mr. Pom and I need to talk about this and re-evaluate.

[abramos]

Aug 22, 2014 14:01:46 GMT -5 @mrsspunky said:

Aug 22, 2014 13:53:14 GMT -5 abramos said:

Flexible spending accounts are no longer strictly "use it or lose it" as they were in the past; before the IRS changed the rules in late 2013, FSA funds not used by year-end would be forfeited. But FSA-account owners can only roll over $500 of their unused balances from one year to the next.

Wow! I did not know you can roll over up to $500 on our FSA. Almost every year, DH and I scramble around the end of the year to try to spend the money we have not used up.

I am not sure how I can let my company know about this.

This is new as of either this year or was a late development for reimbursements for 2013. The plan administrator should be informing your employer. Also I believe your employer has to opt-in to the rollover vs. the grace period.

www.irs.gov/pub/irs-drop/n-13-71.pdf

Ah. I see. Looks like we have the grace period option with my employer.

[crashgizmo]

We love love love our HSA, and max it out every year.

However, last night we had a meeting with a financial advisor, and when I mentioned the HSA he said, "well you know those are going to go away soon." I didn't fully understand what he meant by that- is that somehow connected to Obamacare?

[Deleted]

Aug 22, 2014 16:34:00 GMT -5 crashgizmo said:

We love love love our HSA, and max it out every year.

However, last night we had a meeting with a financial advisor, and when I mentioned the HSA he said, "well you know those are going to go away soon." I didn't fully understand what he meant by that- is that somehow connected to Obamacare?

I think he may have been confused. There have been decreases on FSA limits over the years and a lot of people mix up the 2.

Edit: a basic search reveals possibly eliminating plans for people with individual and small group plans (under 100 ees) as a part of the actuarial value calculations in the PPACA.

[rosiedozie]

I've been maxing out my HSA for the past three years. I had originally done it in anticipation of having kids in a few years, but maybe I should consider it a permanent contribution.

[skib]

I'm so glad this was posted! We are planning to contribute the max to an HSA for the first time this year, so it's nice to see that plan is a smart one.

[sillygoosegirl]

It's been ages since I worked for an employer that believed in high deductible plans. I had an HSA briefly at my first job out of college, but it was unclear to me how much of the money I would have gotten to take with me when I left the company: they put in like $1500/year on my behalf and took back all of what was in the account when an employee left if the employee hadn't contributed to it, but it wasn't clear how the money would be split if the employee hadn't contributed. I was pretty happy though... Zero out of pocket medical expenses, money expected to roll over year to year, and really low premiums when I was on the high deductible plan there.

[noodleoo]

Wow, thanks for posting this. I had no idea there was a retirement benefit to a health insurance plan! We always go for the cheapest PPO plan we can get.