The most informative source I’ve seen so far, thank you! But I’m still not clear, my company offers an HSA which costs me (premium?) $125/month. Do I need to contribute more monthly in order to have the $6600 deductible available IN the HSA, or do I just pay OOP and only pay $125 out of payroll?
The $125/month premium comes out of your paycheck and can almost be thought of as a membership fee. You don't get anything out of it other than the access to the healthcare plan. To build up your HSA account you need to contribute throughout the year, up to the maximum which I believe is $3,300 right now. In some cases your employer will contribute some toward that amount. For example, mine pays $600 for the year so I would only need to contribute $2,700 throughout the year. The HSA is a savings account that can be invested. It's separate from your health insurance which is what the $125/month premium is going toward. But say you have to go to the doctor for your annual physical and the out of pocket cost is $250 (just making up a number here) then you would be responsible for that amount and pay it. You would pay for any other care you receive during the year (X-Ray, ER visit, etc) until you hit your deductible. Once you hit that you would pay the coinsurance amount in your plan. Say it's 20%. If you went back to the doctor and the visit was $250, you would be on the hook for 20% of that ($50). You would pay coinsurance on care until you reach your out of pocket max. Once you've reached that you shouldn't have any expenses for approved care other than your monthly premium. From my understanding, the benefit of the HSA is that you can keep it invested over time and allow it to grow. Then when you reach retirement age you can reimburse yourself for medical expenses as long as you have the receipt saved somewhere (say you had a surgery that cost $4,000, you could reimburse yourself decades later out of your HSA). I believe those reimbursements are tax free.
Thanks! That’s the most in-depth explanation I’ve been able to get after looking into it each year at OE time. Never thought TH-cam would help me with health insurance! 😅
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The most informative source I’ve seen so far, thank you! But I’m still not clear, my company offers an HSA which costs me (premium?) $125/month. Do I need to contribute more monthly in order to have the $6600 deductible available IN the HSA, or do I just pay OOP and only pay $125 out of payroll?
The $125/month premium comes out of your paycheck and can almost be thought of as a membership fee. You don't get anything out of it other than the access to the healthcare plan.
To build up your HSA account you need to contribute throughout the year, up to the maximum which I believe is $3,300 right now. In some cases your employer will contribute some toward that amount. For example, mine pays $600 for the year so I would only need to contribute $2,700 throughout the year.
The HSA is a savings account that can be invested. It's separate from your health insurance which is what the $125/month premium is going toward. But say you have to go to the doctor for your annual physical and the out of pocket cost is $250 (just making up a number here) then you would be responsible for that amount and pay it. You would pay for any other care you receive during the year (X-Ray, ER visit, etc) until you hit your deductible. Once you hit that you would pay the coinsurance amount in your plan. Say it's 20%. If you went back to the doctor and the visit was $250, you would be on the hook for 20% of that ($50). You would pay coinsurance on care until you reach your out of pocket max. Once you've reached that you shouldn't have any expenses for approved care other than your monthly premium.
From my understanding, the benefit of the HSA is that you can keep it invested over time and allow it to grow. Then when you reach retirement age you can reimburse yourself for medical expenses as long as you have the receipt saved somewhere (say you had a surgery that cost $4,000, you could reimburse yourself decades later out of your HSA). I believe those reimbursements are tax free.
Thanks! That’s the most in-depth explanation I’ve been able to get after looking into it each year at OE time.
Never thought TH-cam would help me with health insurance! 😅
You never show a link for the HSA video..