Finance News & Insights

  • Mary Jane Ritchey

    I can’t resist giving my personal opinion of HSAs. I think (after being in one for a year) that they are only a means of of big insurance companies sucking people dry. While the employee struggles to pay his doctor and perscriptions, etc. the insurance company sits back and collects hundreds of dollars per month per employee. And, you guessed it, it doesn’t cost them one red cent. Overall, it costs the employee & employer around $12,000 per year. For What? We have to pay more for visits because we carry an insurance card. If you tell the Doctor you don’t have insurance, your bill drops almost in half. The only thing an HSA is good for is if you have a major accident or illness. Please let it be known to all employers that even though Ins. Co. try to make you believe you will be saving and be able to offer this great package to their employees, Don’t buy it! They get big bucks, and you get NOTHING.

  • J M Barber

    Interesting comment from MJR (8/4/2008) and I can relate to the frustration, unfortunately, the real problem with Consumer Driven Health Plans (CDHP) accompanied with an HSA (Health Savings Account), is a lack of consumer training, which is certainly not on the shoulders of MJR. These health care plans are, without a doubt, more complicated than your traditional health care plan, however, there is potential to save money (both employer and employee).

    After serving in the health care field for 30+ years, I truly believe that the only answer to our skyrocketing health care costs lays in the hands of the consumer – that’s you and me. Although foreign to us, it’s time we take this product in hand, learn more about it, and change the trend!

    CDHP with an HSA:
    1. Typically, you have a traditional health care plan through an employer. The yearly deductible is high – there are certain required criteria for coverage.
    2. You have an “employee owned” HSA account. That means you take the account with you – it’s your account for always.
    3. Your employer can decide to contribute a set amount of money – normally annually – into your HSA to offset or help offset your yearly deductible. You can contribute to the account. IRS has limitations on the yearly amount that can be contributed.
    4. You incur, for example, a $500 x-ray charge. The doctor/radiologist files the $500 claim with your traditional insurance carrier.
    5. Your insurance carrier applies the $500 to your yearly deductible.
    6. You receive an Explanation of Benefits (EOB) from the insurance carrier reflecting the $500 amount put toward your yearly deductible.
    7. You fax or send the EOB into your HSA vendor. If you have funds in your account, you get a $500 check – you pay the doctor/radiologist.

    Yes, the above example is simplified but basically that’s it in a nutshell. With this type of health care plan, an individual has to setup a filing system to monitor health claims, insurance EOBs, and HSA account information. The sacrifice in trying to control health care costs is our time, which is definitely sacred to most of us, however, I think it will be worth it in the long run.

    One thing to keep in mind, if you stay as healthy as you can and build up money in your HSA account, at retirement age (currently 65), you can take the money out and buy yourself a new car if you’d like! Well, you may want to just hold on to it to help offset the medical expenses not covered by Medicare but at least it’s your account – you own it.

    Lastly, just a comment, most of us have high deductibles ($500 or more) on our auto insurance. We pay for the maintenance on our vehicles such as oil changes, new spark plugs, tire rotation etc. How much do we put into the maintenance of our own health?

  • As a participant and plan administrator of an HSA and HRA, I have to disagree. The first year transition is the hardest. I would rather reduce my premium by half and put that half into a “medical IRA”, earn interest tax-free, accept my ERs contribution to my HSA, have my employer reimburse me the first 50% of my OOP max under the HRA, than give the insurance company ALL that in premiums. I’m a moderate user. I recognize the pain of deductibles, but people don’t realize they were paying just as much in premiums and co-pays that never applied to deductibles, then would have to pay the deductibles. High users don’t build a fund, but even if they use the HSA as fast as it’s funded, it’s with pre-taxed dollars. It’s tough for high users at the beginning, but at the end they receive more in benefits than a traditional plan. For low-users, it’s a way to really build some savings; for moderate users, it’s probably a wash. The philosophy differs considerably from HMOs and low copays, which is how we got into this mess.