OT: Health insurance premiums (self-employed)

The law was changed a few years ago. I don't know all the details, but one of our plans is an HSA where the money doesn't disappear at the end of the year. It can be built for years. The only key is that any money can't be withdrawn for anything other than medical expenses. If I were younger I'd jump at it.

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  Keith

So you must get sick or the money is lost? That's not a good thing. My great-grandpa would have lost all of it because he never saw a hospital, didn't even need glasses to read the paper until he quietly passed away just shy of his 103rd.

Hmm, if they are structured the way you said they are then I guess I don't.

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Regards, Joerg

http://www.analogconsultants.com

in

grow.

It's pre-tax money so there are strict rules on how it can be used. You *are* going to get sick, eventually.

His wife/family never got sick?

It really was a good deal, but had a very high deductible insurance policy to go with it. If I could go three years without using it there could be a sizable amount in there.

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  Keith

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Probably but I don't like any laws telling me I have to ;-)

That's also why I never signed up for the flex-spend option at my former employer. Turned out I wouldn't have needed it and then I'd have to blow it on some unnecessary medical whatever. By not signing on I still have that money.

Nope. His wife died earlier but in a similar way. The kids were born at home like it used to be in those days. They ate healthy and walked everywhere. Except when he needed new shoes and hopped onto a motorcycle at age 95. We were just praying that he knew that these modern Japanese bikes weren't the slowpokes from the war.

Well, yes, but it seems you then would have to disgorge it on a restricted range of medical expeditures. What if you don't really need to?

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Regards, Joerg

http://www.analogconsultants.com

in

grow.

Ah, okay, not your typical HSA then. We have that 'special' plan too. I tried it for a year, and realized what a rip off it was. What happens is that the HSA is the FIRST PART of your insurance, to cover the 'deductible', and only goes for expenses that would normally be covered by your insurance. Now, I don't mean it covers the deductible/copay, it covers ALL your expenses for the medical insurance. Do you realize what a doc charges for say, just a physical? While you are paying a $15 copay, he is charging around $250-$500. That full $250 comes out of that 'HSA', so you use it up really quickly. Basically, it only becomes a sorta good deal if you never, ever use a doctor for any reason. For me, my wife saw a chiropractor and had used the whole thing up by February... :-(

And, no, you can't carry over amounts on normal HSAs. They have been promising to change that for four years now, but nothing has actually come about yet...

Charlie

The pricing practices for the health care industry are beyond comprehension. A game is played so that the "customary and common" prices are highly inflated to compensate for the percentage that will be paid by Medicare/Medicaid and many (most? all?) insurance plans. This is akin to oil companies deciding to raise gasoline prices in the U.S. to $12/gallon to compensate for credit card companies only paying $3/gallon when the "real" price would be $2/gallon.

I've occasionally asked medical providers what the cash price would be for something and the reaction has been as if I'd committed heresy. I've always been quoted the "going" rate even if the provider wouldn't have to bother with all the insurance paperwork, etc. Needless to say, the providers have never gotten a cash payment...

In

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You don't *have* to pay out of the HSA.

Maybe your employer hasn't caught up with the times? I've had the option for two years now, though I haven't "bitten". Last year there was an incentive ($500, IIRC) to join the HSA.

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  Keith

I don't like to spend post-tax money when I can spend pre-tax money. 40% isn't small change.

No, you save it. That's why it's called a Health SAVINGS Account.

LOL. So, any insurance premiums he paid were a waste of money too. Same thing.

Wait until you do. A conventional insurance policy doesn't pay you back if you don't use it either. An HSA is essentially a "self insurance" policy. The new tax rules allow deductibility of the this insurance pool too.

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  Keith

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Exactly right--you're a poet Mr. Jensen. The true effect is redistribution of wealth--taking money from those who have it, and giving it to those who don't. Paying modest benefits to the wealthy is simply an obfuscation.

Consider: if the benefits paid were from your own contributions invested, then being returned to you, then the system could never be out of money, as it is!

Same analysis applies to Social Security. The President proposed eliminating Social Security payments to rich folks, but his opponents were vehemently opposed. Why? I heard several speak on this. They were afraid it would make SS look like a charity--unearned--which of course it mostly is.

Best, James Arthur

My last kid was born at home. Called the nurse midwives at 6AM when my wife was at '10cm', they arrived at 6:20AM, Lee was born at 6:30AM.

Still done these days. The convenience was fanstastic. Nothing to pack, nothing to prepare for really. Comfortable circumstances, etc.

Jon

This is a good way of phrasing it. Many people imagine that having a deduction means things don't cost as much. But they cost what they cost. The difference between the two is that you don't have to pay taxes to the Feds/State on top of what you have to pay a retailer. So it just costs what you see that it costs, instead of costing a lot more than it appears to.

I look at pre-tax expenditures as not having a 'monkey on my back' when I go buy things. As much of your life as you can shovel under pre-tax, the better. 100% is perfect, which you can almost achieve if your life _is_ your business and your business _is_ your life.

Jon

Sure. As long as there are no strings attached. I need to educate myself some more WRT HSAs but what I've read here so far sounded just like the "use it or lose it" scenario we had with the flex-spend plan in our company. Which I didn't take out for that reason and I am glad I didn't (cause none of us got sick...).

So can you carry it into retirement and then use it, preferably like an IRA?

He was a railroad men and they had some kind of gvt insurance in Germany. No premiums, at least not a whole lot AFAIR.

Big difference: The HSA is (has to be?) spent on little things because that fund is limited. A conventional plan is there even when something catastrophic happens, way beyond of what you ever paid in. Sure they don't pay you back if you don't use it except for some European plans that do. But it's your protection against a financial disaster if you suffer a major stroke or cancer, something a HSA cannot do.

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Regards, Joerg

http://www.analogconsultants.com

There are *always* strings attached with pre-tax money. I do hope you max out your IRA/401K. That's got strings attached too, but those strings aren't a reason to ignore the funnel of otherwise taxable income.

The use-it-or-lose-it still had some merit. Some expenses are predictable, physicals for kids, glasses, prescription drugs.... Two years ago the laws *were* changed so real HSAs are possible. Again, I'm not a tax expert, but my employer was pushing them.

As long as it's used for health retaliated expenses, yes that is my understanding. Check it out with your CPA.

Sheesh, even railroad retirements in this country are enough to make the NEA green.

Nope, old thinking. Think of it is your personal insurance pool. If you don't use it it carries along. Sooner or later you will use it. Obviously, this should be used with a catastrophic policy.

Which is why you back up the HSA with catastrophic health insurance, which is what insurance is really for[*]. Basically, you're covering the normal stuff with pre-tax money as your employer would do.

[*] OTOH, Howie Dean made catastrophic insurance illegal here.

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  Keith

My wife went into the hospital on my birthday. My son was born 15 days later and they were both in the hospital for another week. not every birth goes quite as smoothly as yours.

Not much to pack there either. *GET THE TO THE HOSPITAL- NOW*. Then it was all about fighting a newbie doctor.

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  Keith

I do max it. The strings completely go away once you retire, with the exception of payouts where you must make a choice I believe by age

70-1/2 or so. But then you are free to use it for a cruise, a new TV, whatever.

No kids, my glasses are the $15 magnifier kind from Tarjei or Costco and neither I nor my wife take any regular prescription drugs. We might have to some day but predicting that is like guessing next week's lottery numbers.

Yeah, I guess I should really check that out. For us that would be the make or break decision point for the HSA route. It would be sad when you stay healthy and have to stare at a pile of your own money but can't touch it anymore. If it could be used for dental work, then maybe it's ok.

Yes, that's the idea, to use it with a catastrophic policy. But it has to make sense also for the case where we (hopefully) don't get sick.

Why did he? That would solve part of our countries problem with the 45+ million that have no insurance at all. At least some of them would be covered when the big one hits. Most of the uninsured I know either cannot afford a policy or received blanket turn-downs because of prior health issues, meaning they can't get insurance even if they wanted to.

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Regards, Joerg

http://www.analogconsultants.com

There is also the 59-1/2 clause, which I'm researching now.

I wear the $1 store kind, when I do, but my wife is an expensive date (>$500 for her last pair). She is also (type II - controlled) diabetic so there is a lot of cost there that's foreseeable.

I believe it can be used for pretty much *anything* health-care related. Perhaps not for the escort service down the road (unless they have a sex therapy license), but pretty much everything else, at least as ours is written.

Sure, but it's PRE-TAX money. It can be used for things you new use taxed money for. If it's not used this year it can now be saved.

A move to force "single payer" by forcing all others out of the business (my employer is self insured). It never happened so folks like you were screwed from both ends. ...typical New England Leftist Democrat crap. BAH has been talking about a similar situation in MA.

Yes, but according to the leftist Democrats, like Howie Dean, Business is evil. Do note that Vermont is the home of the reinsurance business. It's only *people* who shouldn't be insured and must have their hand out to government.

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  Keith

No doubt. This is why you do the usual things beforehand. Regular checks, etc. Many things can be guessed at before the birth takes place and pointed out as a risk you shouldn't take. But if everything looks 'normal' earlier then it can be worth the remaining additional chances you take.

We went though two other children before our last and they were a lot more effort and stress on us. This last one at home was a dream, by comparison.

Jon

$500 every few years isn't a lot of money, but you can probably get them online for 1/5~1/10 of that unless there's a requirement for name-brand frames. Including progressive bifocals.

Best regards, Spehro Pefhany

--
"it\'s the network..."                          "The Journey is the reward"
speff@interlog.com             Info for manufacturers: http://www.trexon.com
Embedded software/hardware/analog  Info for designers:  http://www.speff.com

After closing out an environmental audit on-site on a Friday, Wife was feeling bad at ~7:45 am on Saturday morning (3-4 weeks before due date), convinced her to go into the hospital (3 minutes drive), they hooked up a fetal monitor right away, decided to do an emergency C-section and plucked the little b*gger out by 8:30 am. Incubator with monitors for a day or two, and some nasty head-to-toe rash reaction she had to the anesthetic. I think the outcome might have been rather less favorable in a rural location far from a good hospital. All this holistic stuff is fine, but I think you want to have modern medical facilities available (and a way to pay for them) if something doesn't go exactly according to plans.

Best regards, Spehro Pefhany

--
"it\'s the network..."                          "The Journey is the reward"
speff@interlog.com             Info for manufacturers: http://www.trexon.com
Embedded software/hardware/analog  Info for designers:  http://www.speff.com