Author Topic: HSA with higher premiums?  (Read 1908 times)

FenderStrat

  • 5 O'Clock Shadow
  • *
  • Posts: 29
HSA with higher premiums?
« on: February 20, 2015, 11:30:21 AM »
My company's health insurance is offering a new option that includes a health savings account. I'm very interested in getting into an HSA, but I can't decide if this is a good deal. My understanding is that HSAs are available with cheaper health insurance plans that have higher deductibles. However, this plan is the more expensive option... not by much, $20 more per month ($204.61 bi-weekly vs. $194.58 bi-weekly). Both plans have the same $2000 deductible for an individual. The more expensive HSA option has a lower out of pocket limit ($5500 vs. $6350), and lower copays ($10 less). I don't get sick much, so the lower copays don't quite justify the extra $20/month. So should I pay $20/month just to have an HSA?

Bonus question: Would you include an HSA in overall asset allocation?

seattlecyclone

  • Walrus Stache
  • *******
  • Posts: 5283
  • Age: 35
  • Location: Seattle, WA
    • My blog
Re: HSA with higher premiums?
« Reply #1 on: February 20, 2015, 11:46:13 AM »
Does the company kick in any money to the HSA? Many employers will put a bit of money in there to seed the account and provide further incentive to go on the HSA plan.

Even if not, the payroll tax you'll save by making a full contribution to the HSA adds up to about $250 (for yourself) or $500 (for a family plan), provided you don't earn more than the social security tax cap. That will make up for the $20/month premium difference, without even considering the income tax savings.

FenderStrat

  • 5 O'Clock Shadow
  • *
  • Posts: 29
Re: HSA with higher premiums?
« Reply #2 on: February 20, 2015, 12:02:25 PM »
The company does not kick into the HSA. But I like the sound of the payroll tax savings. I would be using mandatory withdrawals from my Inherited IRA to max out the HSA, so the income tax savings would cancel out the IRA withdrawal taxes.

terran

  • Magnum Stache
  • ******
  • Posts: 2878
Re: HSA with higher premiums?
« Reply #3 on: February 20, 2015, 12:34:49 PM »
I'm a little confused, are you saying the HSA eligible plan actually has a lower deductible? I'm pretty sure having a high deductible plan is the primary qualification, so you may be able to open an HSA on your own already. You might find http://www.irs.gov/publications/p969/ar02.html#en_US_2013_publink1000204020 helpful.

FenderStrat

  • 5 O'Clock Shadow
  • *
  • Posts: 29
Re: HSA with higher premiums?
« Reply #4 on: February 20, 2015, 12:41:30 PM »
I'm a little confused, are you saying the HSA eligible plan actually has a lower deductible? I'm pretty sure having a high deductible plan is the primary qualification, so you may be able to open an HSA on your own already. You might find http://www.irs.gov/publications/p969/ar02.html#en_US_2013_publink1000204020 helpful.

The deductibles are the same! I know. It doesn't really make sense.