Health Savings Account (HSA)

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Changing to an HSA with a CDHP or a HDHP

Nov 2009

Spouse is federal employee. Health care premiums have increased dramatically. We're considering a CDHP or a HDHP, combined with a HSA/HRA. Can I hear from those who have used this arrangement, please? We're a healthy middle class family of four with good income and adequate savings. peter

I don't have experience with these plans, but I am a long-time federal employee and am now deciding on what option to sign up for in 2010. Last year, I switched from being a long time Healthnet HMO user because the rates had doubled. I switched to Blue Cross/Blue Shield PPO and have been very pleased. I went with their more expensive option because I was nervous about out-of-pocket after being with an HMO. However, my out- of-pocket have been very reasonable. Our health care providers (family of 3) are all ''in-network'', so I am considering switching to the less expensive plan which will save me an addition $1,400 a year if I stay ''in-network''. All that being said, you asked about the High Deductible plans. Frankly, with a family of 4 I personally would not risk it. I think it would be difficult to decide what it the appropriate amount to set aside in your savings account. What I have read is, these plans are best suited for singles with no major health issues who can tolerate the ''risk''. From what I understand, you are basically gambling that you will have no major health issues, accidents, etc. But then again, it was a year ago when I looked at these options and decided they were not right for my family. I will also be interested in any responses to your question. anon

We changed from a quite expensive PPO plan to a CDHP last year. I was a little nervous about it because the premiums seemed absurdly cheap compared to the PPO so I was looking for a catch. As it turned out, the plan has been fine. We've continued to use the same doctors and pharmacies as we used previously, although it always pays to check your own situation. My biggest concern has been to ensure we budget for the deductible. However, because preventive care like physicals, well-child exams, and immunizations are covered 100% (i.e. don't come of the HRA) we haven't spent the employer contribution to the HRA, which rolls over to the next year. Fortunately (touch wood) we haven't had any big accidents or health problems. so far so good

HSA as an alternative to PPO/HMO

April 2009

I am interested in any experience people have using an HSA for their health insurance rather than a more traditional HMO or PPO. We are a family of 4 currently paying for our PPO out of pocket as my husband is self-employed and I don't get benefits at my job. Our PPO rates have increased dramatically of late, we are basically healthy, and would like to lower our expenses. The HSA option sounds great, but it is hard to wrap our minds around exactly how it works and if it is really a bit too good to be true. Any thoughts? Thanks. Kathleen

Hi Kathleen, I would strongly recommend that you switch from paying a high premium/low-deductible plan to a qualified high deductible/low-premium HSA compatible plan. Important clarification: HSAs are bank accounts that work in conjunction with either a qualified HMO or PPO. Like you, I am my own employer (I am a self-employed accountant). I've put a lot of consideration into this very important issue of benefits versus cost for our family. Patelco Credit Union has an excellent rate for HSA accounts, 5.12% APR! A family can contribute up to $5900 per year to this savings account 100% tax-free and income-deductible. Depending on your tax bracket, your medical spending power increases significantly while you quickly build equity. You'll save thousands of dollars in taxes! (See IRS publication 502) Just try to find a family plan that has a deductible less than $5900 (otherwise you won't rollover any money). Even still, it's a big incentive. If you can rollover money and build your HSA over ! the years, you'll be in a good position for the increased health costs of age. To stay within the IRS limits, my recommendation is to target a family plan with a premium under $500 per month and a deductible under $5900 per year with 100% coverage after deductible (Kaiser has one). Only temptation with this strategy is you have to be diligent with deposits since you're in control. Be sure to check for maternity coverage! Good luck, and you're not alone. Matthew

We are a healthy family of 5 who switched from a PPO to a Blue Cross Anthem High Deductible plan last year and are very happy that we did. We use Patelco to manage the HSA ( When we signed up, they were giving a straight 7%, which has since decreased, but at least we didn't put our money in the various stock market plans available... Our current Anthem plan covers annual physicals, mammograms, screening labs (our previous PPO did not cover most of this and cost us much more per month). Other visits we have to pay for, but can use the HSA to pay. We can also use the HSA money to pay for orthodontia and dentist visits, helpful as we don't have dental insurance and have 3 boys with crooked teeth. It's very nice not to have to pay taxes on the money that goes to orthodontia and dental visits. Happy to have switched to an HSA

I've had an HSA for 3 years now, and it's still not easy to answer your question. Our monthly premium went down from about $1,000 to about $500 and I was able to ''pay'' for our daughter's complete orthodontia treatment from the HSA funds, which was great. I do wince now when we get treatment or prescriptions since paying full price at Kaiser, while still less than outside Kaiser, is alot more than our former copayments. We, too, don't get sick very often so hopefully will never meet the deductible. And with Kaiser the paperwork is very frustrating. There are often no charges when we check in, but elaborate billing statements which are impossible to decipher and don't come until several months after service is rendered. You may not have Kaiser and this may work more smoothly with other providers. The tax paperwork with the IRS is simple because the HSA institution provides an EOY report. Hope this helps. Heidi

I switched to an HSA last year and have mixed feelings. Because I am healthy and seldom use any medical services, it is much less expensive for me (on the order of $1200/year). Also, I get to choose who I see.

On the other hand, over the last 10+ years, I got to like the convenience of Kaiser. Now I have to do the research, I have to go to multiple places if I need labwork, x-rays, physical, medications, etc. For a family of four, you may save quite a bit of money with an HSA.

I would suggest you talk with Sally Hammons at D|A Financial Group in Lafayette (925-254-7100). She'll be able to tell you exactly what the pros and cons are, both in general, but more importantly, specific to you. (Tell her Greg referred you.) cessnagreg

Health Savings Account administrator rec

March 2009

Do you have any recommendation for a financial institution with which to set up a Health Savings Account (HSA)? I've heard that Credit Unions are good. I'd like somewhere that has no fees, good service, and a local branch. I live in Berkeley/Elmwood. The last post on this was in 2007 and I know a lot of new institutions have entered the market. Thanks. Ted

Most HSA's I know of are set up pretax through an employer. A little known fact is that AFLAC will set up an HSA for a company if their employees buy AFLAC coverage (which could be Dental, Vision, Life, Accident, Hospital Indemnity, etc.). AFLAC does not charge for the service. It is a ''loss leader'' for them. See for more details or email me and I can refer to an AFLAC associate locally who handles HSA's. Kathryn

Financial institutions that have HSAs

Nov 2007

I'm looking for recos on banks/financial institutions that have HSAs. (I already have the necessary medical plan). It looks like some California banks that do this include Patelco and US Bank. Has anyone used these for an HSA? Any other financial institutions I should consider? Thanks.. anonymous

Hi we use Patelco and it has been just fine. anon

I use Pactelco, and I have been very satisfied with the service. Anon

Good bank/financial institution for HSA

May 2007

We are getting an HSA compatible health insurance plan, and need recs. for a good place to set up the HSA. Does anyone have any good, bad, or ok experiences to share? I am looking for an account that has low or no fees, and it doesn't matter to me whether investment options are offered (I don't plan on investing the money). Thanks for any suggestions!

About 3 years ago I searched hi & lo for institutions that provide HSA. I found 1st HSA, and they have been very helpful eg. I can get a real person without going through a phone tree, the person on the other end is friendly and knowledgable. or 1-888-769-8696 anon

We use HSA Bank. But an awesome research site is They give great advise and have done research about fees and such about many different companies. Good luck and congrats on a smart financial move! tami jo