General Question

JLeslie's avatar

Should I get an HSA healthcare plan?

Asked by JLeslie (65562points) December 10th, 2018 from iPhone

I’ve had an HSA healthcare plan for years.

In 2019 we might make very little money. We sold our business and my husband will have zero income until he secures some work. I make very little money and we have some investment/interest income, so let’s say we might make $25k on the conservative side if my husband doesn’t make money in 2019. Most likely he will make something but let’s stick with the minimums.

Should I go for a cheap healthcare plan with a low deductible instead of an HSA? We are making so little the government will subsidize the premiums to a large extent, but the high deductible will mean I’ll pay a few thousand on health bills. I probably won’t need to “hide” the money in an HSA since we very likely won’t make much money in 2019, but putting it in the HSA might mean tax free medical money for the future.

What do you think?

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6 Answers

Mariah's avatar

Sounds to me like a low deductible plan might be worth it this year since you should qualify for extensive subsidies to offset the higher premium.

That’s kind of a high-level suggestion though without seeing the actual plans available to you. For instance, I generally opt for the high-deductible plan offered by my company over the low-deductible one, which might seem counter-intuitive given my medical situation. That is, until you look at the details – our high deductible plan covers expenses 100% once the deductible is hit, while the low-deductible plan requires me to pay 10% coinsurance until I hit the out of pocket max. I avoid coinsurance like the plague.

KNOWITALL's avatar

All the HSA does is make all money used a tax deduction, otherwise its pointless. I’d go high deductible for a year and take my chances.

JLeslie's avatar

@KNOWITALL The HSA is the high deductible. My current deductible for my husband and me is $12k I think. It’s crazy high. The plan is $1100 a month, but if we only make $25k it will probably costs me $100 a month. It’s crazy. But then, if we wind up making more than $70k I’ll owe the government back the $12k at the end of the year.

The HSA also lowers your income if you contribute, like an IRA, but you don’t have to have earnings to contribute like an IRA, so it’s great for people who have the savings to do it.

The money used from the HSA account isn’t really a tax deduction, it’s tax free income. Is that what you were talking about, the money from the account to pay for health services and drugs?

JLeslie's avatar

I just realized I could put money in the HSA and use my regular checkbook to pay for heathcare in 2019 since I will have very little taxes to pay.

KNOWITALL's avatar

@JLeslie My accountant says I’m not taxed on any money I put on my HSA and use, so she said use it all and only add more if I’ll use it, which I won’t….lol

Wow, that’s a high deductible and high cost….yikes! Is this on the ACA? I got charged back $500 or so for only using it for three months for my husband and I. Not going to do that again.

JLeslie's avatar

@KNOWITALL Right, all the money in the HSA is tax free. You can invest it in various funds while in the HSA if you want and the earnings are tax free like an IRA.

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