Author Topic: Health Plan Conundrum  (Read 1455 times)

dragoncar

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Health Plan Conundrum
« on: October 07, 2014, 01:28:53 PM »
Have to decide about health care for 2015 and I'm not sure what to do:

I currently have an HSA with about $10k in it.  The high-deductible plan is free.

For $75/mo, I can get on my wife's plan, which basically has zero out-of-pocket costs in network.

I'm pretty healthy, but the appeal of a relatively low-cost all-inclusive plan makes me want to get on my wife's plan.  Likely it's a pre-tax deduction, which would bring the real monthly cost down to around $45. 

I'm not allowed to have both, so I'd lose my ability to contribute to the HSA.

Side question: Which asset class should I put in my HSA brokerage window, given that I have to pay CA tax on it as a regular taxable account?  I'm thinking stocks instead of bonds.

mxt0133

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Re: Health Plan Conundrum
« Reply #1 on: October 07, 2014, 02:15:10 PM »
Side question: Which asset class should I put in my HSA brokerage window, given that I have to pay CA tax on it as a regular taxable account?  I'm thinking stocks instead of bonds.

Please someone correct me on this, but i'm 100% sure that you DO NOT pay tax on HSA accounts as per: http://www.irs.gov/publications/p969/ar02.html#en_US_2013_publink1000204020.

How is it a regular taxable account?  The only limitation on HSA accounts are you can only make contributions if you participate in a HDHP.  If you go to your wife's health plan your existing HSA account will still grow tax free.

Also check out this article about using an HSA as the super retirement account.  The jist is to max out contributions, invest, pay for your medical expenses out of pocket, keep the receipts, and then claim then after your investments have grown tax free 20-30 years from now.  I have not done so my self yet, but I'm really thinking about it.

http://www.madfientist.com/ultimate-retirement-account/
« Last Edit: October 07, 2014, 02:18:21 PM by mxt0133 »

dragoncar

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Re: Health Plan Conundrum
« Reply #2 on: October 07, 2014, 02:25:55 PM »
Side question: Which asset class should I put in my HSA brokerage window, given that I have to pay CA tax on it as a regular taxable account?  I'm thinking stocks instead of bonds.

Please someone correct me on this, but i'm 100% sure that you DO NOT pay tax on HSA accounts as per: http://www.irs.gov/publications/p969/ar02.html#en_US_2013_publink1000204020.

How is it a regular taxable account?  The only limitation on HSA accounts are you can only make contributions if you participate in a HDHP.  If you go to your wife's health plan your existing HSA account will still grow tax free.

Also check out this article about using an HSA as the super retirement account.  The jist is to max out contributions, invest, pay for your medical expenses out of pocket, keep the receipts, and then claim then after your investments have grown tax free 20-30 years from now.  I have not done so my self yet, but I'm really thinking about it.

http://www.madfientist.com/ultimate-retirement-account/

http://www.bogleheads.org/forum/viewtopic.php?f=1&t=100972

That reminds me, though, to stick my 30 year treasuries in there.  State tax free.