The HSA Push, is It Really a Good Deal?

[ticker_shuffle]

With so much effort to get people to put their money into an HSA I have to wonder of the real value for consumers. I am coming around to thinking that maybe I should try to sell more, with all the incentives from carriers, but I need to identify what type of customer benefits most. Since the penalties for withdrawing or using funds for non medical use is they current tax rate (all tax incentive lost) and 10% I have to think, how can someone maximize this type of policy.

Trying to explain these plans and get someone to open a bank account along with the plan makes for, not necessarily a more difficult but at least more elaborate sale.

Who is selling HSA here and what are you telling clients to make these attractive besides the lower premium and "tax" benefit? Or is that enough?

 

[Crabcake Johnny]

Family plan comparison:

PPO: $2,500 deductible + $2,500 coinsurance X 2 family members = $10,000 OOP

Rate: $500 X 12 = $6,000

HSA: $5,000 deductible + 100% coinsurance = $5,000 which is half the liability

Rate: $400 X 12 = $4,800 for a $1,200 savings

Put $5,000 in their HSA account and it comes off their taxable income. For easy math say 25% - so they're paying $1,250 less in taxes.

That $1,250 is real savings. With no medical costs the true savings are $1,250 + $1,200 + $2,400.

This mean they can spend $2,400 or less in medical costs and they're ahead of the game - or $200 per month.

 

[Justin Bilyj]

opening an account is easy, sell them on the insurance. most people back fund it so that nothing is locked in stone..

 

[COInsguy]

Trying to explain these plans and get someone to open a bank account along with the plan makes for, not necessarily a more difficult but at least more elaborate sale.

Little lost...What reasons do you have to tell them to open an account through a carrier preferred bank? The HSA account only has tax benefits and doesn't even EVER have to be opened to have an HSA plan. You don't obviously get the entire benefits of the plan that way though.

I personally tell my clients how the account works: ie: you don't have to have the money in there when you incur expenses just an account open. Then I tell them they should just open an account wherever they bank as this is the easiest way to utilize the policy.

Are you getting some kind of bonus for selling the carrier's "preferred" HSA bank? I personally think HSA's are a less elaborate sale just put it simply:

Save your money on frivolous benefits that you don't get your moneys worth and instead use your premium dollars to get the lowest risk that you want instead of higher deductibles with some junk 4 copays per year that your paying $50/mo to have.

 

[CHUMPS FROM OXFORD]

They can shop for banks...or use Chase. I use Chase and have been happy. That's who I tell my clients to use.

 

[dgoldenz]

I've been using FirstAM Bank and had no problems. They have no monthly fees, no minimum balance, no minimum required deposit, etc. Very easy.

 

[Newby]

I just tell them to fund their HSA account before they put one penny away for retirement. It's tax free going in and tax free comming out if spent for healthcare. That's better tax treatment than a Roth IRA in my opinion.

 

[ticker_shuffle]

Little lost...What reasons do you have to tell them to open an account through a carrier preferred bank? The HSA account only has tax benefits and doesn't even EVER have to be opened to have an HSA plan. You don't obviously get the entire benefits of the plan that way though.

I personally tell my clients how the account works: ie: you don't have to have the money in there when you incur expenses just an account open. Then I tell them they should just open an account wherever they bank as this is the easiest way to utilize the policy.

Are you getting some kind of bonus for selling the carrier's "preferred" HSA bank? I personally think HSA's are a less elaborate sale just put it simply:

Save your money on frivolous benefits that you don't get your moneys worth and instead use your premium dollars to get the lowest risk that you want instead of higher deductibles with some junk 4 copays per year that your paying $50/mo to have.

From what I am reading there is a minimum annual deposit of $1200 for individual and $2400 for family in 2010.

 

[souldeux]

From what I am reading there is a minimum annual deposit of $1200 for individual and $2400 for family in 2010.

Those are the minimum deductibles a plan must have for a plan to qualify as HSA eligible.

 

[ticker_shuffle]

Those are the minimum deductibles a plan must have for a plan to qualify as HSA eligible.

doh! Some reason I read that as a minimum deposit. Thanks for setting me straight.

So the minimum deductible does not mean spent on services? For example, you can just pay the doctor visit copay out of pocket and never put a cent in the account?