HSA (Health Savings Account)

[cbloom]

I'm trying to get an HSA, and I'm curious if anyone has one that they like. I've looked at a few and reading through the fine print I've found :

Key Bank - huge ridiculous fees, no way jose
Chase - $2.50/month , otherwise looks pretty okay
Other ?

Unfortunately it seems like the nice online savings people like ING aren't in the HSA business yet and none of my banks offer an HSA [img]/images/graemlins/mad.gif[/img]

For review :

I think an HSA is a good more for most poker players. Assuming you have an HDHP (which you should) (HDHP = high deductible health plan), you can put about $2500 in an HSA each year tax free, just like an IRA, but you don't have to wait until retirement to spend it, you can spend it on any health care expenses. It basically makes your health care costs tax free. (health care costs are deductible in some cases, but this is way better because it just comes off the front end like an IRA so you don't have to worry about itemizing and making sure each health care expense is in fact deductible). You can put the money in any kind of fund just like with an IRA, though some banks only offer savings or money market accounts.

An HSA and a SEP-IRA are just about the only things a pro poker player can do to reduce their tax burden.

So has anyone here gone through this?

[SlowHabit]

I've looked at HSAs but I didn't like them because of the high deductible per year. You have to pay a lot out of your own pocket until the insurance starts taking care of you.

So the factor that determines on whether or not you should get a regular health premium or a HDHP (HSA qualified) depend on whether you visit the doctor a lot.

FWIW, if you file as a pro, you don't need an HSA to deduct health care expenses. The great thing about HSA is you don't have to pay taxes on any gained interests and thus theoretically, you could have a huge account saved for health care expenses after your poker playing [or self-employed] days.

[mrclean368]

I use a small local bank. Bank of Oak Ridge. They have no monthly fees but the interest isn't very good, 1.5%. I have a check card that goes with it. I haven't shopped around in a couple of years but this one was the best offer I could find at the time.

[cbloom]

[ QUOTE ]
I've looked at HSAs but I didn't like them because of the high deductible per year. You have to pay a lot out of your own pocket until the insurance starts taking care of you.


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But your monthly fee is a lot lower. There's a certain balance. If you're young and healthy and expect to have some years where you don't go to a doctor at all, then an HSA+HDHP is a much better deal. If you have something huge happen, then it's roughly the same because with an HDHP you're paying like $50/month + $2000 deductible instead of $200 or $250/month.

BTW the FAR FAR more important thing with health insurance is to make sure you have 100% coverage past your deductible. Some of the budget plans are like a $1000 deductible and then 70% coverage after that. That can bankrupt you if something really bad happens, because 30% of a major surgery is still way too much.

[ QUOTE ]

FWIW, if you file as a pro, you don't need an HSA to deduct health care expenses.

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That's not really true, so far as I know. For one thing you have to itemize, which for most young people is not a good deal, the standard deduction is better. But the big problem is this :

"You may deduct only the amount by which your total medical care expenses for the year exceed 7.5% of your adjusted gross income"

Hmmm.. but actually as I read the details you're right, there's an except for self employed people, you can deduct 100% and in fact you can deduct your premiums as an income adjustment. That's strange, I think even Russ Fox isn't doing that.

[EuroMetetron]

Ive been deducting my health insurance costs for years. It isnt something new.

[silentbob]

My firm has offered HSA+HDHP for the upcoming year. I did not go to the doctor once this year and my health has always been pretty good so presumably such a plan may be appropriate for me. If I do switch to the HSA+HDHP, is it EV+ for me to contribute the $2,900 max to the HSA even if (2,900+reduced HDHP premium) would be about $1,500 more annually than what I would spend next year on my existing higher premium?

My rationale is that because I'm in the 33% tax bracket, any pre-tax income deduction I can get by contributing to the HSA is free money, even if I don't use the funds anytime soon (because at worst, I can invest it at a money market rate). It would also eliminate any need for me to set aside money for flex-spending in future years. Is this reasoning sound or have I failed to consider other factors?

[krishan]

[ QUOTE ]

FWIW, if you file as a pro, you don't need an HSA to deduct health care expenses. The great thing about HSA is you don't have to pay taxes on any gained interests and thus theoretically, you could have a huge account saved for health care expenses after your poker playing [or self-employed] days.

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I wasn't sure you could just deduct health care expenses as a pro. I know you can do insurance premiums but wasn't sure about other expenses.

Also, what about elective procedures? I'm pretty sure I can't just deduct laser eye surgery from income.

Krishan

[Jimbo]

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I wasn't sure you could just deduct health care expenses as a pro. I know you can do insurance premiums but wasn't sure about other expenses.


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You are correct, they can only be deducted to the extent that they qualify for under your itemized deductions (over 7% of the medical expenses) if you are a sole prop or partnership.

Jimbo

[natedogg]

I have an HSA and HDHP for my family of four. It is a vastly superior deal.

1. Try Wells Fargo, the fees are low and they have higher-growth oriented funds you can allocate your money to while it's in the HSA account. The funds are generic and not great but at least it's not a money market.

2. The HSA converts to a plain IRA once you turn 59.5. So in other words, it's a way to put even more money into an IRA as well as being a nice source of medical funds.

3. The HDHP is usually close to even in terms of monthly cost + deductible compared to the full monthly cost of a low deductible plan with a nice copay Plus the HDHP is usually a PPO. I recommend the Blue Shield plan it has been great and they are very reliable. (My family incurred about 200K in medical expenses last year and Blue Shield paid without a peep).

4. the 100%/70% limits still include a max out-of-pocket. My family hit the max and it was only slightly higher total cost to us than if we had paid for a fuller-coverage health plan. This si the worst case scenario, we expect to come out ahead more years than not.

5. If you are self-employed (schedule C), you get to deduct your health care premiums *before* calculating your AGI. This is a huge bonus.

6. Damn the california socialists in the assembly. They are trying to institute a canada-style single-payer health plan for California, including outlawing all private insurance, and Ahnold is making noise that he may sign it. Be careful. If you are californian you should be prepared to play some shenanigans with your residency to avoid being part of that mess...



natedogg