Understanding HSAs

Aug 14, 2007

  1. Vision
    Offline

    Vision Expert

    Posts:
    33
    Likes Received:
    0
    Are there any other reasons to recommend a HSA other than when a prospect is looking for the cheapest coverage possible?
     
    Vision, Aug 14, 2007
    #1
  2. CHUMPS FROM OXFORD
    Offline

    CHUMPS FROM OXFORD Guru

    Posts:
    10,261
    Likes Received:
    49
    State:
    Ohio
    Tax advantages.....Paying for what you use as opposed to what you don't use.

    And actually, not always the cheapest option. Cat only and ST are usually cheaper.
     
  3. salpro22
    Offline

    salpro22 Guru

    Posts:
    1,966
    Likes Received:
    30
    State:
    Texas
    salpro22, Aug 14, 2007
    #3
  4. Vision
    Offline

    Vision Expert

    Posts:
    33
    Likes Received:
    0
    Thanks for the reply and link.

    How does a HSA get funded with pretax dollars? Does a % of the premium go to the account? Why does Assurant charge $4/month for service on a HSA?
     
    Vision, Aug 14, 2007
    #4
  5. salpro22
    Offline

    salpro22 Guru

    Posts:
    1,966
    Likes Received:
    30
    State:
    Texas
    Depending on the HSA bank the client can contribute monthly, quarterly, etc. The premium pays for the insurance coverage and does not go into the account.

    The monthly fee can be waived if you add any Suite Solutions rider to the plan the rider stays in force OR the client sets up a $50 minimum draft into the account on a monthly basis.
     
    salpro22, Aug 14, 2007
    #5
  6. MHart
    Offline

    MHart Super Genius

    Posts:
    159
    Likes Received:
    0
  7. Vision
    Offline

    Vision Expert

    Posts:
    33
    Likes Received:
    0
    Great link, thanks.

    It seems like selling a HSA involves more work than a copay; am I wrong? Should a client talk to an accountant or financial planner also?
     
    Vision, Aug 15, 2007
    #7
  8. JMO Fan
    Offline

    JMO Fan Guru

    Posts:
    403
    Likes Received:
    1
    If HSA money is left over at the end of the year, it rolls to the next (unlike FSA, which is use it or lose it). The policyowner also owns the HSA funds. It functions like an IRA for future health care expenses.
     
    JMO Fan, Aug 15, 2007
    #8
  9. GreenSky
    Offline

    GreenSky Guru

    Posts:
    15,339
    Likes Received:
    461
    State:
    Nevada
    HSA plans are the simpliest form of health insurance. For many carriers, you pay the 1st $XXX per year, they pay the next $2-6 million.

    Lower priced plans usually have restrictions such as little or no Rx, hospital only coverage, etc.

    I sell almost nothing by HSAs and let the client know that they can fund the plan if they wish. I refer them to a couple of banks with no fees and let them do it.

    I have no idea how many clients fund the plan and I really don't care. I sell HSA plans simply because they are comprehensive, have few limitations, and they are priced right.

    Rick
     
    GreenSky, Aug 15, 2007
    #9
  10. somarco
    Offline

    somarco GA Medicare Expert

    Posts:
    29,265
    Likes Received:
    3,001
    State:
    Georgia
    I have a very simple approach to selling the HSA and other non-copay plans.

    A) Price the plan they want. If they want a copay & $500 deductible I give it to them.

    B) Ask when they last hit their $500 deductible. Ask if they are aware their liability after the deductible is another $2000. (Of course they don't know this because they never went thru the $500 and never read their policy).

    C) Price a $2500 plan. Tell them the $2500 plan is just like the $500 plan but with $2000 more risk if they have a bad claim year. Point out they are saving (in many cases) about $3000 a year for taking on $2000 more risk. Ask if that makes sense to them.

    D) Ask how often they go to the doc. Women go 1 to 2x per year. Kids maybe a couple of times (except those under age 2) and men go only if they are unconscious. Quote them a $2500 deductible with no copays. Ask how they feel about saving another $100 per month. Tell them if they buy the copay plan and someone goes to the doc every month they are paying $130 ($100 in premium + $30 copay) to see the doc. Even if they don't go to the doc that month they are still paying $100 just for the privilege of seeing the doc for $30.

    E) Tell them money they pay to the carrier belongs to the carrier. At the end of the year the carrier does not send a rebate check or even a thank you note. They KEEP your money and give you a rate increase.

    F) Ask if they would rather send the money to the carrier and only get it back if they get seriously ill or are run over by a truck. Or would they rather send less money to the carrier and keep the balance in their bank.

    Most people go for option 2.

    By following these simple steps you have taken them from a $500 - $1000 deductible plan with copays and a $900 family premium to a $2500 deductible plan with no copays for $300 per month. That $600 savings makes you look like a genius.

    Now you are ready to talk about the HSA which is nothing more than the plan you just sold them plus a bank account.

    Option 1, the carrier keeps all your money.

    Option 2, the carrier keeps some and you keep some.

    Which do you like better?

    Probably 95% of my sales do not involve a copay.
     
    somarco, Aug 15, 2007
    #10
Loading...