Author Topic: Anyone here have an Employer paid HDHP + HSA?  (Read 1533 times)

Erica

  • Bristles
  • ***
  • Posts: 464
  • Married
Anyone here have an Employer paid HDHP + HSA?
« on: August 17, 2016, 01:37:53 PM »
Thanks ahead of time for anyone's help

My employer pays the Kaiser Premium fully for my HSA qualified High Deductible Health Plan. Just in basic terms, does any of the monthly premium they pay to Kaiser Permanente ($300 per mo) go towards the balance in the HDHP??

I do not want to fund my HDHP and no one else is doing it.  So is it useless?? I mean besides the catastrophic portion and well visits?

Does this mean my HSA account will never have any money if there is no money (Aka via the HDHP) to put in it?

For some reason, I thought part or all of the $300 premium paid by my employer would accumulate... then at some point, I would transfer it to my personal Bank account (HSA). I am aware that after age 65, per the IRS.GOV website I printed out regarding HSA's, that withdrawing after age 65 means no 20% penalty is applied.

So anyone here who has a HDHP fully funded by their employer BUT no other monies by employer is contributed or by yourself or anyone else, is there any balance in that account which can be used to pay for medical expenses?  My employer has no custodian so I opened an HSA at a bank. I am trying to keep this as simple as possible, yet understandable. Thanks
« Last Edit: August 17, 2016, 01:41:22 PM by Erica »

kudy

  • Pencil Stache
  • ****
  • Posts: 935
  • Age: 35
  • Location: Northern Colorado
Re: Anyone here have an Employer paid HDHP + HSA?
« Reply #1 on: August 17, 2016, 02:39:37 PM »
Premiums paid toward a health plan are separate from contributions to a health savings account (HSA). In order to have an HSA, your health plan must be a "high deductible" plan (HDHP). If your employer is paying the premiums on the health plan, but aren't contributing to your HSA, no money will accumulate.

My employer pays the premium on my HDHP, and also front-loads my HSA with $500 at the beginning of the year. That's their total contribution to my savings, but they do that because the HDHP premiums are less expensive for them than if I opted for a regular health plan.

I then make up the remainder of the yearly contribution ($2850) to the HSA with paycheck deductions, so that at the end of the year a total of $3350 has gone into my HSA.

Erica

  • Bristles
  • ***
  • Posts: 464
  • Married
Re: Anyone here have an Employer paid HDHP + HSA?
« Reply #2 on: August 17, 2016, 02:41:57 PM »
Thank you Kudy, that is what I suspected.


neo von retorch

  • Magnum Stache
  • ******
  • Posts: 3163
  • Location: SE PA
    • Fi@retorch - personal finance tracking
Re: Anyone here have an Employer paid HDHP + HSA?
« Reply #3 on: August 17, 2016, 03:10:15 PM »
Is there a reason you don't want to fund your HSA?

While I would not prioritize it above 401K matches / maximums or high interest debt payoff, it is a nice tax shelter.
http://www.madfientist.com/ultimate-retirement-account/
http://www.madfientist.com/hsa/

RangerOne

  • Pencil Stache
  • ****
  • Posts: 685
Re: Anyone here have an Employer paid HDHP + HSA?
« Reply #4 on: August 17, 2016, 04:22:56 PM »
I would strongly consider using the HSA even if it is only a little bit. The tax free money just makes your medical dollars stretch that much farther. Also most HSA's let you keep the HSA account even if you switch jobs and insurance since it is separate from your insurance and it will remain good for use on any medical costs now or in the future. Though only stipulation is that you can only make contributions if you are actively enrolled in an HDHP.

At a minimum you should try to use the HSA to cover your average expenditure on office visits, like tests ran during your yearly physical, and any prescriptions you might buy.

Keep in mind you can also you an HSA account to pay for things not covered under normal medical like Dental and Vision.

Most people, even very healthy people, spend at least a few hundred dollars on this stuff a year. Why not pay for it tax free and save some money. And then maybe as a bonus build up a tax free health emergency fund. Having a well funded HSA takes a lot of potential heat off my main emergency fund since I know I don't have to worry about paying for Dental Surgery, Vision or my normal deductible out of my normal cash. And being tax free it builds up faster and saves me about 25% on the dollar dodging federal taxes. I still get burned by Cali saddly since they don't allow HSA exclusion from income tax...

abhe8

  • Bristles
  • ***
  • Posts: 482
Re: Anyone here have an Employer paid HDHP + HSA?
« Reply #5 on: August 17, 2016, 04:27:15 PM »
And hsa contributions from payroll deductions are free of FICA tax, in addition to income tax.

sisto

  • Pencil Stache
  • ****
  • Posts: 861
  • Age: 49
  • Location: Sacramento, CA
Re: Anyone here have an Employer paid HDHP + HSA?
« Reply #6 on: August 17, 2016, 05:45:42 PM »
My employer pays the premiums for HDHP, but I put in the max allowed to the HSA to avoid paying taxes. I plan to use the money for health costs when I retire. I get a nice tax break now and won't ever pay taxes on it provided I use it for qualified medical expenses.

HotPotato

  • 5 O'Clock Shadow
  • *
  • Posts: 30
Re: Anyone here have an Employer paid HDHP + HSA?
« Reply #7 on: August 17, 2016, 06:43:12 PM »
And being tax free it builds up faster and saves me about 25% on the dollar dodging federal taxes. I still get burned by Cali saddly since they don't allow HSA exclusion from income tax...

I never knew that. Any idea of other states that have the same stipulation?

MDM

  • Walrus Stache
  • *******
  • Posts: 8461
Re: Anyone here have an Employer paid HDHP + HSA?
« Reply #8 on: August 17, 2016, 08:17:29 PM »
I do not want to fund my HDHP and no one else is doing it.  So is it useless?? I mean besides the catastrophic portion and well visits?
...
My employer has no custodian so I opened an HSA at a bank. I am trying to keep this as simple as possible, yet understandable. Thanks

Is there a reason you don't want to fund your HSA?

While reading the OP, I thought the same question neogodless posed.  Looking closer now, it isn't clear whether the appropriate distinction between HDHP and HSA has been drawn...?

Erica

  • Bristles
  • ***
  • Posts: 464
  • Married
Re: Anyone here have an Employer paid HDHP + HSA?
« Reply #9 on: August 17, 2016, 08:51:03 PM »
And being tax free it builds up faster and saves me about 25% on the dollar dodging federal taxes. I still get burned by Cali saddly since they don't allow HSA exclusion from income tax...

I never knew that. Any idea of other states that have the same stipulation?
Yes. New Jersey and Alabama also tax the HSA's

Erica

  • Bristles
  • ***
  • Posts: 464
  • Married
Re: Anyone here have an Employer paid HDHP + HSA?
« Reply #10 on: August 17, 2016, 08:54:41 PM »
Thank you everyone for your time and bringing fourth good points.

There is a bit of an issue with my ethnicity and the legality of contributing to an HSA while utilizing my regular Doctor. Not that I see her much. Currently Native Americans are not allowed to contribute to their HSA for three months after receiving medical care from an Indian Health Clinic or Native American Hospital. This could change. H.R. 5452 passed the house . This video is a little over a minute. https://www.youtube.com/watch?v=Ma_83QPZ4Kw  Iíve had insurance which covers all of my medical and dental care so the Indian Clinic has always just billed my insurance... so itís not like I am freeloading off of the taxpayers. But my concern is I might want to do so if I ever loose my job and need medical care. IHS is like insurance to non-native americans. To know you can get free health and dental care to some degree if needed is very comforting

I took this into consideration when signing up for the HDHP+ Chiropractic Rider.  Since my Chiro rider would not be utilized at the Indian Health Clinic and I donít get sick enough to see a Doctor there, I decided to go ahead with the HSA but my thinking was in error. When my Company said they needed my Bank info, I assumed the premium would be going into my account. To save for healthcare. Or maybe Kaiser would be sending it. I had no clue I would be funding it, my bad. But even after my re-search, i was misunderstanding the basic premisis of an HSA

If HR5452 is passed, then I will be allowed to receive medical treatment from my Native American Health Clinic. When I falsely believed the premiums or part of it went into my HSA, well that made it more attractive.

As someone touched on, HSAís will still be taxed by the State of California at 8% but I will save will save regarding the Federal Tax.

I only make $30,000 ma year so I arrived into a 15% Fed tax bracket. My Ebay and Amazon Sales have been unreported so far, another $7000 per year. I do these online stores while on the clock at my regular job. My employer is fine with it since I do more than the majority of the other Supervisors. Many of My clients want to go thrift store shopping so when I see them, I take them.

After our 175,000 inheritance goes thru, and if HR 5452 passes which allows Native Americans to save for their Healthcare via HSAís, well that might make contributing to a HSA alot more appealing. I am still re-searching it though. Our inheritance is a gift and it will not taxed in California or by the Feds from what I understand so won't be pushed into another tax bracket.

On another note, the Health Savings Act of 2016 would allow about double the amount allowed by IRS to be contributed to an HSA, if it goes thru. It's unlikely Obama would sign that bill imho

.
« Last Edit: August 17, 2016, 09:03:54 PM by Erica »