5 important questions to ask about an HSA

Is an HSA plan the right choice for me?

5 QUESTIONS YOU SHOULD ASK YOURSELF!

1. Do I want to save money for current and future health expenses?HSA plans have two primary components – health insurance coverage and an actual tax-advantaged savings account. You can use the money in the savings account to pay for your current health expenses, but you also own the money in the account regardless of whether your health coverage changes or you move to another city. So, HSAs offer an opportunity to build tax-advantaged savings for current and future health expenses.

2. Which type of health plan gives me a better financial value?Do you prefer to save money on your monthly premiums in exchange for paying some of the initial costs of your health care services out of your own pocket (known as the “deductible”)? Or would you rather pay higher monthly premiums in exchange for your insurer covering a portion of your costs from day one? With HSA plans you can put the money you save on your premiums into your tax-advantaged savings account to build interest, whereas with a traditional plan, more money is spent on premiums regardless of how much health care you actually use.

3. Have I considered all the relevant costs for each plan?To make sure you’re not comparing apples to oranges, you should consider all of the cost elements associated with each plan option. Traditional plans may include: higher monthly premiums, a smaller deductible, as well as copays and/or coinsurance. HSA plans may include: lower monthly premiums and a higher deductible. So depending on your health needs, a high-deductible plan may very well cost less overall than repeatedly paying a traditional plan’s copays and coinsurance

4. Will I lose unused money in the HSA?HSAs don’t have a “use it or lose it” provision. Just as some cell phone providers now let you roll over unused minutes, HSAs let you roll over your unused dollars from one year to the next, so you don’t have to worry about ever forfeiting your money.

5. Is it difficult to connect the HSA plan with the bank account?Since you need to select a financial institution to open your savings account with, if the health insurer offering the HSA plan also has a financial institution available, it can make the process of setting up and using an HSA much easier and more convenient. Some insurers have their own bank and offer a single enrollment process so you can sign up for both the health insurance plan and the bank account at the same time, eliminating the need to go through two separate enrollment processes. Also, one way to turn HSA funds into long-term health care savings is to invest that money in mutual funds or other opportunities. So make sure that the bank you choose has investment options available.

Old article with a new(er) message

If you subscribed to Employee Benefit News back in 2006 you may have come across an article in the June issue entitled "Full replacement feat - HSA helps Wendy's grill health costs" by Leah Carlson Shepherd:

Wendy's put the kibosh on its medical inflation by offering a health savings account. The fast-food chain started offering the HSA as the only coverage option for workers last year.

Jeff Cava, Wendy's executive vice president of HR, notes, "We held premiums completely flat. That was the first time that happened in the history of the company."

Health claims costs fell by 14% from 2004 to 2005, and claims for this year are projected to be 4% less than last year. This coupled with premium savings, leads Cava to project the three-year ROI for the HSA to be 221%.

Roughly 60% of employees contributed to an HSA last year and 45% contributed this year. About 90% of HSA-users had account balances at the end of 2005, and the average balance was $600. The funds stashed in HSAs totaled $4 million. Wendy's contributes 60% of the deductible to workers' HSAs each year. Preventive care is covered before the deductible.

"I think the key here was the focus on preventive coverage,” Cava explains. “We're trying to change behavior. If it's about saving money, then you've missed the point. It has to be a sustained change in behavior that leads to a sustained improvement in health."

There is much more to this article, but since this is all that is posted on the Employee Benefit News website, you may have to dig through your old subscriptions.

What COULD Universal Health Care mean for us?

Why do we want Universal Health Care?

Sure, it sounds great. If I have to go to the doctor, the "government" (whoever that is) pays for me. We look longingly at Canada and mutter "I wish I didn't have to pay so much for my . . . back surgery, knee replacement or cancer treatment......"

Bertrand Russell said "The most savage controversies are those about matters as to which there is no good evidence either way. " - Bertrand Russell British author, mathematician, & philosopher (1872 - 1970) - I think that often we argue fiercely over matters we do not fully understand. I know I'm at fault here as well, and as far as Universal Health Care goes, I admit I do not know nearly enough to be considered savvy in the matter, however, I'd imagine I have read more on the subject than most.

Now here's the catch: It takes MONTHS if not YEARS for you to receive treatment for what ails you.

Check out this article:

Health Care America lauds film, critiques proposalPosted on: Wednesday, June 13, 2007 9:15 AM EDT
Health Care America, a non- partisan, non-profit health care advocacy organization, released the following statement in response to filmmaker Michael Moore's three-part proposal for health reform."We give Michael Moore credit for being honest about his true goal: a total government takeover of health care. While we welcome any serious discussion generated by his new movie, SiCKO, and believe that every American deserves access to affordable, quality care, Moore's "proposal," which includes abolishing private health coverage and treating drug manufacturers like a "public utility," is not a serious solution."Government-run health care seems like a simple answer to fix the challenges facing our health care system, but in reality, government-run health care systems around the world force patients onto long waiting lists, ration care, limit access to lifesaving medicines and often deny urgent treatments. A recent survey has shown that ninety-four percent (94%) of Americans say they don't want to scrap our current system for this kind of government-controlled model," said Sarah Berk, executive director of Health Care America.Patients in Canada's government-run system currently wait over 17 weeks between the time they are seen by a general practitioner and a specialist; in fact, wait times in Canada are at an all-time high despite increased spending. Many Canadian patients are forced to come to the US each year for procedures - - many of them lifesaving -- they can't obtain in their own country.
Sorry Hillary...........

The disengagement of our minds

I found this great article which I will post in parts. My comments will be a different color (so you can either read them or skip them) however I think most articles require active reading, so I'd encourage you to respond to the article in your own way.

More consumer education needed on HSAs

By Gary S. Mogel June 4, 2007

By NEW YORK — A key roadblock to health savings account acceptance is that many people know little or nothing about HSAs and their required high-deductible health insurance plans, according to industry experts. - I think it is very important for an individual to know about/understand what it is that is happening with their health care as well as their money. Producers like I exist to help guide individuals, however we can not, nor do we (I think) want to read the minds of our clients, and therefore we can only suggest what we believe is a proper fit.

The main culprit behind the learning inertia is the experience of many Americans over the past 20-plus years, during which they have become “disengaged” from their own health-care decisions, said Jerry Ripperger, director of consumer health for Principal Financial Group Inc. in Des Moines, Iowa.

Participating in a health maintenance organization, “people had to decide only whether to go to their primary-care physician or a specialist,” he said. With consumer-directed plans, they suddenly have to make myriad other decisions about providers, price and quality of care, Mr. Ripperger noted. - This may be a point that could be filed under "Why people shouldn't get HSAs" because they require more attention as well as responsibility. When you go to your doctor's office, you are not paying a flat $10, $15, or $20 co-pay, but you are paying the price the insurance company would pay if you had a $0 co-pay. So perhaps you need to then find the most cost effective doctors' office.

A quarter of U.S. adults — and more than a third in the 18-to-34 age group — “don’t know” or “know little” about HSAs, according to a report released last month by Mintel Group in Chicago.
“It’s hard to get young people to think about health care — they be-lieve they’re invincible,” said Terry Hunter, chief executive of Connect-YourCare, a health-care account ad-ministration firm in Hunt Valley, Md.

But HSA ignorance may be bliss, according to an April study by Cambridge (Mass.) Health Alliance, an affiliated hospital of Boston-based Harvard Medical School (InvestmentNews, April 16). Cambridge — as well as anti-high-deductible consumer groups — say that the plans discriminate against women and cause people to neglect their health to minimize out-of-pocket costs. - Another point for "Why people should NOT get HSAs". If you want an HSA you need to still be responsible for your health. REMEMBER that if you are saving money on the premiums, then you CAN afford to go to your doctor's office. DO NOT BLOW the money you've saved. Put it in your HSA or some other bank account so you don't end up avoiding the doctors'.

“Consumers are still uneducated about HSAs and their benefits,” said Susan Menke, a senior financial analyst for Mintel. The industry’s “direct to consumer” marketing and employers’ dissemination of information to workers are inadequate, according to the report.

Part of the problem is that HSAs aren’t in the comfort zone of many insurers and banks.

Which is why it's so nice that Golden Rule has partnered with EXANTE Bank. They actually know and understand what they are doing!

Insurers know health care but aren’t good at consumer education, while banks are good at consumer education but don’t know health care, said Kirsten Trusko, banking senior manager for BearingPoint Inc., a management and technology consulting firm in McLean, Va. Again look at the Golden Rule - EXANTE Bank team.

But insurers, banks and other companies in the HSA chain are determined to get the word out.
“We’re redesigning our marketing materials and looking carefully at media and presentation options,” said Dennis Triplett, president of health-care services for UMB Financial Corp., a bank holding company in Kansas City, Mo. Flashcasts and podcasts will be used to reach out to consumers who are more comfortable with those information delivery methods, he added.
The bank uses separate “business to business” presentations to convince employers to offer HSAs and high-deductible plans, and employees to sign up, Mr. Triplett noted.
Principal has presentations geared to educating brokers and agents, who in turn educate clients, Mr. Ripperger said. The insurer, a major provider of retirement benefits, also conducts training on employer premises to show employees the benefits of HSAs and high deductibles.
Before employees buy in to HSAs, “skepticism and distrust” have to be overcome, said Vik Kashyap, chairman of Canopy Financial, a San Francisco firm that manages HSAs.
They often are intimidated by the high deductible and don’t realize that it usually is waived for preventive care, Mr. Kashyap added. - Be careful with this, at Golden Rule you have to buy a rider that will allow for that quality. At Aetna you do not. Please be sure to ask about the various plans you may be interested in.

For employees and clients who don’t need the HSA to pay medical costs, an effective strategy is to emphasize the accounts’ savings and tax advantages, he said. Contributions, investment earnings and eligible expenses paid from HSAs are tax-exempt, Mr. Kashyap noted.

Employers can get employees’ attention by “seeding” the accounts with startup money to help offset some of the initial deductible expenses, Ms. Trusko said. The average “seed” is about $1,200, but it varies widely, she noted.

Financial advisers also must take on HSA education responsibilities, as about 30% of client retirement savings will go toward health care, Ms. Trusko said.

Advisers should discuss HSAs with clients in the same conversations where they discuss the likes of individual retirement accounts and 401(k) plans, Mr. Hunter said.

Lower premiums, and the tax savings, make the HSA “a financial no-brainer,” said Regan Turner, a certified financial planner with Professional Financial Specialists Inc. in Boulder, Colo.

- While I tend to agree with Mr. Turner, an HSA is not right for everyone. I happen to think that they are right for most people, but you need to ask yourself what your end game is.

Why you shouldn't go with an HSA!

As you know I've been quite the HSA advocate for health insurance. I own an HSA, my boss looked at it and couldn't figure out why he wouldn't want one and so now he has one, and well, a lot of people I come into contact with see the benefits of them. However they are not for everyone.

I think that the world longs for honesty so I try to give it to those I'm in contact with and so now I'll try to give you some honesty too.

Why are HSAs bad?

First off, let's consider WHY you want one. While you may save greatly on your premiums, you may not save on your doctors' office visits. You must pay what the insurance company pays (a heck of a lot more than a $10-20 copay). ALSO in order to get the benefits of the tax deductions, you must have enough money in your account to be able to fund your visit -- otherwise you'll be penalized by the bank that holds your HSA. To transfer your funds, you'll need at least one business day for the transfer to clear. Don't get caught without enough funds! Also, most HSAs happen to pay a little over 4.0% while the market is at 5.+% (since I'm not a financial advisor I'll let you do the math....)

Second, if you are planning on having children in the near future, please make sure that you will be saving enough money to pay for it! An HSA does not cover maternity!

Lastly, you may want to look into riders if you do not have sufficient savings to cover your deductible if something were to happen prior to your saving enough money. It would be really awkward to find that the day after you signed up for your plan that you incurred a huge bill! Please think ahead and learn as much as you can before purchasing a plan.