The Biggest Health Savings Account (HSA) Rules

Of course this is subject to opinion but at this time of the year, there are two specific HSA rules I like to focus on and remind people about.

The first is the establishment of one’s HSA account.  If you are one of those folks like me who got their HSA qualified High Deductible Health Plan early in the year, you might have been, ahem, a little bit slow to establish and the actual bank account (the HSA) that enables you to put $ aside for your present and future health care expenses.  You have until the end of the year (there are 31 days in December for those of us who are calendar impaired) to set up your account.

If you have not set up your HSA, there are two very good reasons why you should do it.  First off, you can not reimburse yourself from your HSA for any medical expenses you had prior to the date of the HSA being set up.  And secondly, you won’t be able to take any tax deductions for money you’d like to put into it for 2009.

The second rule ties to the first one.  So long as you get that account set up this year, you have until 4/15/2010 to make contributions for 2009.  This is key because even if you haven’t put a nickel in the account this year, you can still fund the account through 4/15/10 and take the full tax deduction for the deposit against your 2009 taxes.  If you do not take advantage of the tax benefits of your HSA you are “leaving free money on the table.”  And that’s, well, kind of stupid.

Now if you don’t have any $ to put into your HSA right now or would like to contribute more, one way to do so is through a program called My HSA Rewards.  It is a new stealth way to put $ into your HSA.  Basically it is a shopping program.  You shop through the merchants that participate in the program and get a % back from your purchases which can be deposited into your Health Savings Account.  Simple.

Call Me Bubba But The Problem With Health Care Is…

I saw a picture of some congressman sitting in front of a stack of paper last week that was the latest House crack at a piece of legislation that is supposed to represent health care reform.  I think I saw that is was something like 1,950 pages long.    I’m pretty sure any document that is that long is good for attorneys, but beyond that I have to say I am skeptical.

I think it is sadly humorous that there are those in government who think the whole healthcare system is too complicated for the average Joe to sort out.  Hell, how did it get so complicated to begin with?  Is anyone asking that question?  There is no doubt it has become brain numbingly complicated.  But those sitting on the left end of the congressional bench intend to make it “better” by making it even more complicated.

One of the biggest problems with health care as I see it, is that our government will not let the people create the market for it.  Or in other words, there  is such heavy regulation of the industry today, it does not work well in a country that functions best when free markets are allowed to work.  In a market economy, real competition would exist, and you and I would be able to drive costs down and quality of care up with our feet and our wallets.  And guess what; it’s fixin’  to get more complicated, and sadly, unless you are getting it at someone else’s expense, it is also going to get more expensive.

So, if you eat right, exercise, and take really good care of yourself, good for you.  Your reward for being accountable for your own health will be that you get to pay for some other fat slob’s lousy lifestyle.  All wrapped up in a nearly two thousand page document called “health care reform.”

The same men and women who  brought us Social Security and then robbed it blind; who brought us Medicare and are vacuuming our wallets trying to pay for it, are now going to get into the health insurance business in a big way.  If history is any indicator of how this hog is going to fly, the average Aamerican can can count on higher taxes, lower quality of care, less competition and less transparency.  Unless we stand up and raise cain, we are in for a true BOHICA moment.

What ever happened to the KISS principle?  I heard a story once that when NASA was trying to figure out how to put men in space  they spent millions of dollars developing an anti-gravity pen that would write in space.  I even remember when I was a kid, they used to hawk those things on the TV (along with Tang and those nasty peanut butter space sticks).  The Soviets solved the anti-gravity writing problem by sending their cosmonauts into space with a few pencils and pencil sharpeners.  

This whole thing has become a political hairball.  We are not going to see real true reform until our anointed and elected ones cough the damn thing up!

Waffle House, Walmart, and Health Insurance

Let me start by saying, as a consumer, Waffle House and Walmart are two of my favorite places on earth as both represent tremendous value.  They also represent hard work working Americans and are very much part of the fabric that makes this country a wonderful place to live. 

Last night my son and I were playing bachelors, and me, having recently dropped a pint of blood off at my local Red Cross Blood center had a “free” waffle coupon sitting in my wallet as a small thank you from the folks at Red Cross. Heck, I’d have done it for the juice and cookies, but if they want to motivate me to the Waffle House, well that’s ok too.

Anyway, we were the only folks in there on a Sunday evening and we got to talking with our waitress.  Turns out she works two jobs, one at Walmart and the other at Waffle House.  In response to her taking a jab at the employer under whose roof she was not at that moment standing, I made the comment, “well at least they offer health insurance,” she rolled her eyes and said, “that’s no good, it’s only “catastrophic” insurance.  When I asked her what the deductible was she said $2,000.  Now, I don’t know if that was totally accurate or not, but I made the comment, knowing Walmart is almost completely, if not totally utilizing High Deductible Health Plans with HSAs, that, in the unlikely event she were to ever to be in a situation where she had over $2,000 in expenses, even if she didn’t have the money right then, a $2,000 debt was something  from which  most people including her could recover.  

She then proceeded to tell me that she got her health insurance through the Waffle House and that she had a monthly premium of $145 ($1,740 per year), a  $50 annual deductible and then her insurance picked up 80% of the ticket and she was responsible for 20%.  Again I don’t know if her numbers were exactly right, because after all, how many people on group health insurance plans actually know the details of them?  Frankly, it really doesn’t matter.

I then suggested to here that in the even she ever got really sick and here hospital bills were say $10,000, then she would still be stuck with $2,000 out of pocket (maybe more, depending what, if any, her out of pocket maximum was) plus her $1,740 in annual premiums and had she been in the Walmart plan, she might actually be better off.  I also mentioned that if she took her premium savings from the HSA type plan and put them into an HSA, if she ever got sick, she might already have a big chunk of the $2,000 deductible saved for in her HSA.  She said there was no way she had any extra money to put into and HSA.  I mentioned that she had $145 per month she was already putting into her premiums through her other plan.

In the end, I simply suggested, given the fact that she was in the fortunate situation of having multiple options, that she might want to take a look at the math.

The point here is not me trying to sell her on a plan that I pretty much knew nothing about or trash her current plan which I also knew nothing about, but rather about the nature of insurance, the complexity of it for most of us, and how many people look at it.  I think the case of my Waffle House friend is fairly typical of many Americans.  They look at their health insurance merely as a way to finance their health care as opposed to using insurance as it was designed, to manage risk. In my opinion, that’s totally backwards. Secondly, between the insurance companies and the Government, they make it so flippin’ complicated, it is no wonder people can’t figure it out.

There are many people in Congress who think we are too dumb to manage our own healthcare, when the reality of it is, they have created an environment where it is so complicated, so regulated, so non-competitive, and so lacking in transparency people end up making uninformed decisions, or worse, no decisions.

If you are looking at your health insurance options, my advice to you is the same as it was to my friend.  Do the math.  You really have to look at everything, the deductibles, the co-pays, well care, premium payments, tax benefits, your own medical payment history, drug benefits and so forth.  No, it’s not simple, but it’s amazing what you will learn by doing the math.

Are HSA Rules Changing?? Call Your Congress(wo)man

Well if you have a high deductible health plan and you are reading this post, you are not alone in the head scratching department.  And if you are like me you here all these little sound bites; like the possibility of HSAs being made illegal, or restrictions being placed on contributions, or diminimized tax treatment of HSAs, or who knows what else, may be making you a bit nutty too.   Shoot, make up your own stress inducing limitation on HSAs and there’s a chance somebody somewhere in Congress who does not believe you can or should have the right to manage your own health care has given it some thought. 

I’m not going to speculate here about how HDHPs and HSAs are going to be impacted by the congressional hairball being coughed up in Washington at this very moment, but rather to urge you to stand up for yourself and your family’s right not to have several $ trillion spent on your behalf in the name of what the United States Government believes is good for your health.

I wrote the headline for this article this morning with the intent to come back to it this afternoon and draft the post.  As luck would happen, in between, I took a bike ride around my basement and heard Mike Gallagher mention a way through which those who want to protect their rights regarding health care can contact their congressmen and congresswomen.  As the headline suggests, I would advocate a call to your elected representatives in Washington, but if you are really in a hurry, you can go through “Free Our Health Care Now” and send email letters to your Senators and Representatives in about 2 minutes by clicking on the link above.  What I loved about it was that it pulled my Senators’ and Representative’s email addresses for me so I didn’t have to look them up.  And as a bonus for the exceptionally lazy (that would be me) it even drafted a letter to my congressmen that I could then either accept or edit any way I wanted.  Total flippin’ no brainer.

Hey, it doesn’t matter if you call or write.  What matters is that you call or write.  Use your voice today!

38 Ways to Travel, And Save Into My Health Savings Account (HSA)

When I was booking a trip to New Jersey this morning, I realized since the beginning of August I have earned  over $30 toward my Health Savings Account through a program called My HSA Rewards, just booking my travel.  If you follow this blog, you know that I am an advocate of that program which helps me  put more money into my Health Savings Account by shopping for the normal things I purchase every day.  

Basically I log in to the My HSA Rewards website, go to the shopping tab, and in the case of my New Jersey trip, click on the link to Priceline and book my trip.  The folks at My HSA Rewards give me 2%  for Priceline purchases which goes into my My HSA Rewards account.  After I  earn $50 into my account I can then transfer it into my Health Savings Account.

But here’s why I am babbling on about this.  Just in the past few weeks, My HSA Rewards has  added a lot of new ways to earn more HSA deposits.  And today as I was booking my travel, I counted up the ways to earn in just the travel category, and it added up to 38 different ways.  They are affiliated with a lot of the online travel sites including Priceline, Expedia, Orbitz and others; airlines like Delta, United and Virgin; Hotels , rental cars and luggage, you name it.  So now there are even more ways for me to earn when I book my travel.  And that’s on top of the hundreds of other ways to shop and earn.  The amount of the awards vary by merchant with some %’s back even in the double digits 

Excluding whatever I earned today from my Priceline purchase and another purchase I made from Overstock.com, to date I have managed to earn over $70 which ultimately will land in my health savings account.   I like that.  That’s $70 that won’t pinch my pocket when I need to use it for my family’s health care.

Don’t Rush Out To Spend Your Health Savings Account (HSA) Bucks

It’s getting near the end of the year and you, especially if you are fairly new to HSAs, may be thinking you need to rush out and spend whatever you have saved in your Health Savings Account or risk losing it at the end of the year.  You may be thinking about buying a new pair of glasses, some saline solution or a big bag of Rolaids to deal with stomach ache you are going to get when your employer tells you how much your insurance rates are going to rise this year.  Or maybe you are about to change jobs and think you need to spend all your HSA bucks before punching out of your current job.

 DON’T DO IT!  You are not going to lose the money in your HSA.  Any contribution made into it by you, your employer from your My HSA Rewards, account or from your Fairy Godmother is yours.  There is no need to go out and blow it for any of the reasons stated above or for any reason.  It’s in the law that the money retained in a health savings account is yours and even if you do not have a qualifying high deductible health plan anymore, the money sitting in the account is yours…forever.   And here’s another little bonus some folk forget, and that is to save your receipts for all of your qualified medical expenses.  That way, if you can afford not to dip into it now but let it sit and grow tax free, you can go back and pay yourself back years down the road using the old receipts as substantiation.  It makes smart tax sense.

Anyway, don’t get yourself worked up into a bunch over those $s in your HSA.  They can sit there forever if you like saving for a rainy day, so there is no need to have that extra stress in your life here at the end of the year about how you are going to blow your HSA dollars to keep from losing them.

Somebody Talk To Me About Blanche Lincoln

I am not a political hound, wonk, addict, freak, junkie, or otherwise over the top aficionado of the American political system.  So no surprise I had not heard of Senator Blanche Lincoln from the great Southern State of Arkansas until I saw the NY Times article today that outlined her role in seven days of debate in the Senate Finance Committee regarding health care reform.

She appears to have a fairly conservative approach toward health care and is certainly far away from some of here Democrat pals pushing for a public option.  So somebody who knows Mrs. Lincoln, talk to me and the rest of my non-political hound, wonk addict, freak, junkie, or otherwise non-over the top political aficionados  about the likes of Mrs. Lincoln and her centrist pals and their potential role in the re-shaping of health care in America.

As a fiscal conservative, I’ll bet Mrs. Lincoln would like programs like My HSA Rewards.

How Can I Fund My Health Savings Account (HSA)?

Face it,  lots of Americans including me, are trying to find better ways to save more and spend less.  Especially when it comes to health care.  We’ve written a lot on this site about ways to save on health care and you can peruse the archives if you are not a regular reader.  But there is one program out there that we really like, and that’s why you see the green banners to the right and left of this post that lead to a program called My HSA Rewards .

We will be writing more about it over time, but the elevator speech goes something like this: “Become a member for free in My HSA Rewards and then when you shop for the normal things you buy every day or for special occasions, do it through www.myHSArewards.com and a portion of the $ you spend will be set aside.  Once you have earned $50 in awards from the purchase you have made you can deposit it into the HSA of your choice.  The rewards vary by merchant and range anywhere from 1% to 25%.” 

The program just launched a few months back with close to 300 online merchants.  Just in the last week they have added another 40 or so merchants to the program.  Think of the brands you shop, and there is a pretty good chance they are on the list of merchant partners.  It’s a great little program that wants to make a difference in how people save for their health care.  It’s pretty much a total no brainer.

Dr. James G. Knight, Are We Really About To Be Stuck With Higher Premiums?

I was reading the AIS Health Daily Bulletin this morning and gnashing my teeth a bit.  In part because I would have rather been doing anything but reading any bulletin and in part because of what it was saying.

The good news is that CDHPs are projected to continue growing, especially those tied to HSAs (we like that).  What kind of chafed my goodies was a comment  by James G. Knight, M.D., CEO of Consumer Directed Health Care, Inc., that made me wonder if my HDHPmight be turning into an HPHDHP (that would be my own new acronym that stands for high premium high deductible health plan).  Specifically he said,

” …..I would expect little additional market penetration unless health plans begin to see the light and price these products in ways that reflect the reduced insured payout inherent to this kind of coverage. In that case, there could be a big increase. Unfortunately, I have only heard of large increases in HSA premiums, not reductions.

If insurance companies wonder why so many people in the U.S. want the government to regulate them out of business, actions like these (and others) are what have congress pissing napalm on the fire of the health care debate.

You gotta wonder; especially if you are living a healthy life, being responsible about your insurance, saving money to pay for yours and your family’s health care, and paying your taxes what the insurance companies are thinking.

Open enrollment is just around the corner.   I don’t think the, the current debate will result in the total destruction of Consumer Driven Health, but if closed and irrational minds prevail, it could be neutered to some degree (is partial neutering possible I wonder?).   On the other hand, if Consumer Driven Health Plans are given the opportunity to work harder for Americans their ultimate benefit would be healthier  and more savvy citizenry, greater competition, and ultimately lower costs.

Now what’s not to like about that?  It’s about as American baseball and a backyard barbeque.

Baucus, 564 Amendments, and Health Savings Accounts (HSAs)

I read this morning that since Max Baucus introduced his version of the health care bill last week, 564 amendments have been put forward for consideration (you can get a taste of them here).  I would like to think that the amendments were each intended to make the bill more efficient and a better proposition for all Americans, but I can’t help but think there are some not so hidden agendas woven throughout those amendments. 

While I am a bubba and not so familiar with the political process, the fact that in the same article Senator Baucus wanted to get the bill out of committee by the end of the week seemed rather extraordinary to me.  Unless, of course all Senators have taken Evelyn Woods speed reading course along the way.

So what happens to your insurance if you have an HDHP with an HSA?  Good question.  Well the bill as proposed increases the penalty on HSA withdrawals prior to age 65 and for non-qualified medical expenses.  Not to horrible on the surface but rather illogical.  More importantly we should be watching what happens to Senator Jon Kyle’s amendments related to HSAs that have been attached to the bill.  Contrary to the proposed legislation, these amendments could strengthen HSAs for Americans who have them.  I found consolidated list of the proposals on Marty Trussell’s website .  Marty is a banker and proponent of HSAs.  Senator Kyl has proposed 9 amendments that offer real value to those of us with HSAs.  Whether they will weather the debate over the next few days (weeks, months) remains to be seen.

That’s all for now folks.