Health plan with HSA eligible?

Discussion in 'Ask An Owner Operator' started by 4wayflashers, Oct 28, 2021.

  1. 4wayflashers

    4wayflashers Medium Load Member

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    Hey everyone, I’m new to the O/O game and have to pick a health plan by 10/31 or wait for open enrollment. I know that’s soon but it would leave me without insurance for a couple more months. Ive been reading about health savings accounts and there tax benefits and I was going to get a high deductible plan anyway. So my question is, should I pick a plan that is eligible for a HSA.
     
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  3. Wasted Thyme

    Wasted Thyme Road Train Member

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    Depends. If you are healthy and need it for preventative and emergency issues. Yes. You have lower premium on the high deductible and your HSA can be used for other things. Including corrective glasses and lasik surgery.

    If you have a medical condition you have regular "maintenance" on. Then no. A PPO or HMO would be better. Premium will be higher. But total out of pocket will be less. With copays in place of the high deductible.
     
  4. Accidental Trucker

    Accidental Trucker Road Train Member

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    What @Wasted Thyme said, with the added caveat that some HSA's are structured in such a way that if you have high expense chronic issues, they can actually end up cheaper. You just have to sit and run the numbers both ways.

    Tax wise, if you are a high income earner and you run into maximum contribution limitations in your 401(k), or if you don't have access to a 401(k), then an HSA savings account can be used to shelter retirement investments from taxation. If you choose the right HSA, they allow you to invest the balance of the account into things like mutual funds, and then it becomes just another retirement account. Used that way, it lets you invest, tax deferred, beyond the annual IRA limit of $6,500 (or whatever it is this year).
     
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  5. 4wayflashers

    4wayflashers Medium Load Member

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    That makes sense. I appreciate it.
     
  6. 4wayflashers

    4wayflashers Medium Load Member

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    I owe the both of you a cup of coffee, really I appreciate it.

    So if Im reading it right, I can get an HSA eligible plan now, effective 11/01, so I have health insurance. Then I have until April 15 2022 to decide on and theoretically max out ($3,600) a Health savings account for this current year?
     
  7. Accidental Trucker

    Accidental Trucker Road Train Member

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    Check with your accountant on the timing and the limit. I'm not qualified to advise on those details.
     
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