Would you do this?

Discussion in 'Teacher Time Out' started by futuremathsprof, Oct 14, 2018.

  1. futuremathsprof

    futuremathsprof Aficionado

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    Oct 14, 2018

    This makes sense and sounds amazing! Could you explain how the money is dispersed and more about the plan itself? I’m not very familiar with an HSA and would like more information.
     
  2. Aces

    Aces Cohort

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    Okay so basically every pay period or month (however you set it up) you would contribute X amount of dollars to your HSA. Sometimes it's an outright contribution meaning whatever total amount you want divided by however many total contributions. (For instance $250 over 26 paychecks is $9.62/each). Or it's a matched contribution where your employer will match whatever you contribute. So in this example, your paycheck contribution would be $4.81 and your employer matches.

    It's kind of like a credit card rather than a debit card in that you have a $250 allowance. Which can be used at any time during the year (even though you pay for it all year). So for instance if your plan starts Nov 1, and on Dec 5th it's time to pay for new glasses you have that full $250 allowance you can use. Your HSA can be used for any out of pocket expense including co-pays and things. Personally I always use mine on glasses because I get extra stuff on mine so it helps.
     
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  3. futuremathsprof

    futuremathsprof Aficionado

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    Thank you so much! Does the amount carry year to year?
     
  4. jadorelafrance

    jadorelafrance Cohort

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    Usually you have to spend it all or lose it within the year however there may be different types of plans/accounts. I just think whatever money you get back from this should go into a separate account that doesn’t get spent except for medical reasons.
     
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  5. Aces

    Aces Cohort

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    Yeah I was going to say it's usually a use it or loose it. And the amount depends on what your elect.
     
  6. futuremathsprof

    futuremathsprof Aficionado

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    This is good advice, except I always maintain a balance above $5,000 in my checking just in case I have to incur a large medical expense in the form of a copay.

    And if the HSA does not carry over year to year I would lose money. Hence, I will probably just keep the money in my checking account and build a larger reserve.

    You guys have made me think this is too small of a security net. I will increase my minimum balance to $10,000.
     
  7. Aces

    Aces Cohort

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    I mean... My coworker fighting cancer last year had around $51,000 in out of pocket expenses last year so... Take that with a grain of salt.
     
  8. Aces

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    And I mean I like my HSA but of course I use it too. Speaking of which almost time for new glasses.
     
  9. waterfall

    waterfall Maven

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    No, I would not do this. It may make sense now, because you were able to find a cheaper plan due to the fact that you're young and don't have any major health problems. That could change in an instant. Young and healthy people get in accidents. You could also develop cancer or another illness that has nothing to do with lifestyle choices. Your plan doesn't make sense long term. If/when something happens, you'll be in a position where you either can't find insurance to take you on, or the cost is incredibly high. As you get older, the cost will rise even if you remain in perfect health and nothing happens to you. Under your employer's plan, they can't kick you off or individually raise your price over the years. It's really not a matter of having savings. Health care costs can very easily go into the hundreds of thousands for pretty basic stuff.
     
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  10. futuremathsprof

    futuremathsprof Aficionado

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    This is mightily useful. Thank you.

    I think I’m going to go with my current plan in the short term until I am 30, provided that I can rejoin the group plan. I also think it would benefit me to contribute to my medical reserves until it gets to the tens of thousands.

    However, if I cannot rejoin the group plan, then I will not do this as I don’t want to encounter a situation where I have to deplete my housing fund, for instance.
     
  11. jadorelafrance

    jadorelafrance Cohort

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    You also may get taxed on that money, so that’s another 25-30% taken out.
     
  12. futuremathsprof

    futuremathsprof Aficionado

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    I have a really good accountant, so my effective tax bracket is only like 15%. ;)
     
  13. Aces

    Aces Cohort

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    Yeah but what's 15% of $9,000.
     
  14. futuremathsprof

    futuremathsprof Aficionado

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    $1,350. But I invest a lot, so I’ll get that back presumably.
     
  15. Aces

    Aces Cohort

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    Presumptions are dangerous when it comes to your health.
     
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  16. Ima Teacher

    Ima Teacher Maven

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    My DH doesn’t know the last time he went to the doctor, but he still won’t risk being uninsured. I have always carried health insurance even when I was young, healthy, and single. You never know what can happen, and I am not risking financial ruin because of a health issue.

    I’ll find better ways to save money.

    Group policies are generally a better deal than individual.
     
    Last edited: Oct 14, 2018
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  17. Backroads

    Backroads Aficionado

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    Possibly. I have a kid who needs insurance. However, there's a chance I could take the payout and buy insurance privately to the same effect.
     
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  18. Ima Teacher

    Ima Teacher Maven

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    I have an FSA and an HSA in addition to my health insurance. My insurance plan includes $500 HSA contribution, and I contribute an additional $150 a month to an FSA and that $2300 is available Jan. 1. it is enough to cover my entire deductible and a good chunk of my maximum out-of-pocket amount. Generally I meet my deductible ($1125) in June or July. After that I’m paying 15% of the insurance rate, which isn’t much.

    HSA amounts do not carry over, but FSA money will.

    HSA is money contributed by an employer on your behalf. FSA is money you contribute.

    I use my FSA card to pay all doctor, dental, and vision plus my monthly massages. It also is what I use for my glasses, my contacts, and my bite guard. I can also purchase OTC medical items like bandaids.
     
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  19. Backroads

    Backroads Aficionado

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    To note, my district actually will pay out the cost of the plan--providing you have proof you are insured otherwise.
     
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  20. geoteacher

    geoteacher Habitué

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    Oct 14, 2018

    Before doing anything, check into all of these, but make sure that you check on what is applicable for your area. My HSA does roll over from year to year. My employer makes a contribution at the beginning for the calendar year, and then I choose to contribute an additional amount up to the maximum allowed by law. To participate, I need to be enrolled in a high deductible insurance plan.
     

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