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Health Savings Account Plans Individuals Question & Answers

2015 August 28
by Sarah Fields

Robert asks…

Besides it being a tax deduction for the employer, how does an Health Savings Account help an employer out?

Thank you for everyone’s response, so far. But my question is how it benefits the employer, not the employee…

Sarah Fields answers:

The FSA is use or lose.
The HSA is NOT use or lose.

The HSA has several different uses.

Some people use it for catestrophic health care coverage. Lower premiums (due to high deductible heath plan it’s connected to) and pre-tax status of deductible and co-pay. These individuals will only put in enough money to stay even for the year.

Other people use it for the above and to build up a health-care slush fund. I’ve been maxing my contributions and if I stay healthy, rolling the money forward.

The downside, the 1040 and 8889 due each year. This is a pain, particularly when the forms have errors on them. (I did the HSA through work and my W-2 doesn’t reflect the pre-tax money properly.) Also, not all health care providers know how the HDHP works and bill full non-negotiated rates even when they *are* in-network providers.

Lisa asks…

where should i look for health insurance plans?

i work freelance as a designer from home and i’m currently covered by my husband’s health insurance plan through his job. we would like to have him quit his job and help me so that we can expand the business, but one big expense to think about is health insurance. where would i begin to start looking for plans for individuals?

Sarah Fields answers:

You need a trusted adviser to help you through the process of purchasing health insurance so that you understand what you are purchasing. Some may suggest going on line to get a quote but you probably already know that there is much more to health insurance than price. Some might even suggest a discount plan which isn’t insurance at all.

Ultimately, you are the one who determines the affordability of your health insurance plan by deciding how much you will participate in sharing the cost of your health care with your insurance company.

If you choose a plan that covers everything i.e. Doctors office visits, prescription drugs, preventative health benefits, maternity coverage as well as low deductibles and low copays your monthly premiums will be significant.

On the other hand if you and your husband are young and healthy and rarely use the health care system you could consider a plan that covers only the major health catastrophe which will result in a relatively low monthly premium. You then can use the monthly premium savings to pay for the occasional doctor visit and still come out ahead.

Check with the agent that writes your home, auto or business insurance he/she can provide you a health insurance proposal that takes into account your budget and health situation.

Use the Internet to educate yourself but use an agent to purchase the coverage.

Paul asks…

What is the cheapest and best health insurance out there for a single fella?

What is the company’s name and what would I have to pay on a monthly basis? Thank you and good day!

Sarah Fields answers:

Only you can determine what is the best health insurance plan. I say that because you are the one that has to make the decision of what the right balance is between affordability and policy benefits.

For example, if you choose a plan that covers everything i.e. Doctors office visits, prescription drugs, preventative health benefits, as well as low deductibles, low co-pays and optional vision and dental benefits your monthly premiums will be significant. The most comprehensive policy may be the best health insurance but it is not the cheapest? You have to decide.

On the other hand if you are young, reasonably healthy and use the health care system sparingly you could consider a Health Savings Account plan in conjunction with a high deductible health plan. In exchange for a significantly lower monthly premium, you agree to pay for your health care costs unless there is a major health care expenditure. Is the cheapest approach the best health insurance? You have to decide.

Maybe you’d rather have more comprehensive individual health insurance coverage, perhaps something in between the cheapest and the best.

You need a trusted adviser to help you through the process of purchasing health insurance so that you understand what you are purchasing. That adviser can answer questions as to what is and is not covered by the policy, explain deductibles and copays and show you the hospitals and doctors that participate in the network. Armed with knowledge of the coverage available and the associated costs you can decide what is the “best” policy. Check with the agent that writes your home or auto insurance he/she can provide you a health insurance proposal that takes into account your budget and health situation.

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