SavingsTalk.com

Storm · 10-31-2007, 03:02 PM

Basically I am getting a new job with the gov't that offers a HSA as a form of insurance. The way it is explained to me is that the balance accumulates over the years and after $2000 is in I can divide the money into different funds that I choose(like a 401k) and earn interest. The money can be used tax free for health purposes only until I'm 59 1/2 at which I can use it for whatever I want. <br /> OK, first, this sounds too good to be true, am I right? Second, I would certainly use this while at the same time be covered under my wifes insurance plan. Any idea if I would still be eligible if I was being covered by another plan? And I guess any other pertinent info would be appreciated. Thanks to all responses!<br />

jordon6001 · 10-31-2007, 03:02 PM

First, it is not too good to be true. I think HSA plans are the best option for people who are generally healthy, in fact, I've got one myself. Many companies offer their employees an HSA qualified health plan. You pay all charges until you reach the deductible. The amount you can contribute to the HSA account is your deductible but not more than $2850. Here is the IRS publication with more information: http://www.irs.gov/pub/irs-pdf/p969.pdf

You can use both plans at the same time. One plan, usually yours, will be the primary. However, the other plan will only pay what is not covered by your policy. With an HSA you get the insurance company's negotiated rates when you use medical services and those rates will not be reimbursed by the other insurance but will come out of your HSA account. You can use the HSA account to pay your wife's co-pays, though, so you get the tax advantage of paying with pre-tax dollars. In most cases, unless you are getting the insurance through your wife at no charge you are wasting money.

10-31-2007, 03:02 PM	#1
Storm Greenhorn Join Date: Jul 2006 Posts: 24 Rep Power: 6	Health Savings Account through the government? Basically I am getting a new job with the gov't that offers a HSA as a form of insurance. The way it is explained to me is that the balance accumulates over the years and after $2000 is in I can divide the money into different funds that I choose(like a 401k) and earn interest. The money can be used tax free for health purposes only until I'm 59 1/2 at which I can use it for whatever I want. <br /> OK, first, this sounds too good to be true, am I right? Second, I would certainly use this while at the same time be covered under my wifes insurance plan. Any idea if I would still be eligible if I was being covered by another plan? And I guess any other pertinent info would be appreciated. Thanks to all responses!<br />

10-31-2007, 03:02 PM	#2
jordon6001 Greenhorn Join Date: Mar 2007 Posts: 9 Rep Power: 0	Health Savings Account through the government? First, it is not too good to be true. I think HSA plans are the best option for people who are generally healthy, in fact, I've got one myself. Many companies offer their employees an HSA qualified health plan. You pay all charges until you reach the deductible. The amount you can contribute to the HSA account is your deductible but not more than $2850. Here is the IRS publication with more information: http://www.irs.gov/pub/irs-pdf/p969.pdf You can use both plans at the same time. One plan, usually yours, will be the primary. However, the other plan will only pay what is not covered by your policy. With an HSA you get the insurance company's negotiated rates when you use medical services and those rates will not be reimbursed by the other insurance but will come out of your HSA account. You can use the HSA account to pay your wife's co-pays, though, so you get the tax advantage of paying with pre-tax dollars. In most cases, unless you are getting the insurance through your wife at no charge you are wasting money.

SavingsTalk.com

Your guide to saving money and making smart investments!