When my employer started pushing hard to get everyone onto an HSA, I wasn't enthused. The old PPO is being phased out, so I figured I might as well get used to it and signed up. To my surprise, after a year with a lot of claims, I'm warming up to it.
The Good Our insurance premiums are way down, compared to the old traditional PPO. My employer makes a generous deposit to my HSA at the start of the year, which offsets the deductible by half. All of our medical spending was pretax, so I won’t feel burned at tax time because our spending, while high, wasn't enough to qualify as an itemized deduction. Unlike the old FSA, there is no “use it or lose it” clause. That money is mine until I need it.
It’s a good feeling to have that money set aside. Example (and why I’m writing tonight): I chipped two front teeth a couple weeks ago, and now they both need crowns. Last night, my wife’s eyeglasses broke, and can't be repaired. Her prescription is expensive. The current HSA balance is more than enough to cover these unplanned expenses. A quick $2000 probably just flew out the door, but we have it. Phew!
The Bad We had more claims than usual last year. Managing the bills and reimbursements turned out to be big chore at one point last summer. I learned quickly that a trip to the local urgent care office, once a simple copay, now generates 3-5 bills from different providers (office visit, diags, someone to interpret said diags, prescriptions, and on and on). Keeping track of what had been billed, paid, and reimbursed (it’s not possible to always use the HAS debit card) was ugly. Basic spreadsheet skills required here, or you’ll lose track easily. The number of individual insurance statements and corresponding bills seemed to just explode (although as I mentioned we had way more claims than usual). If you tend to let paperwork pile up on the kitchen table, an HSA may not be for you. No one wants to see a $6.73 bill go to collections.
The Just… Different Emotionally or psychologically, it’s different. It was not a good year for us, with multiple office visit and Saturday morning runs to Urgent Care. It was horrifying to watch money fly out the window. I had to keep reminding myself that a big chunk of that money was given to me by my employer (for which I am very thankful). I now get to see charges that were once hidden by the simple co-pay, such as a $200 “facilities charge” at Urgent Care, or the fact that a tiny bottle of just enough eye drops to treat ONE eye for conjunctivitis costs $118. Not to mention that some billing departments are a bit of a mess, and take forever to send a simple bill, or even to submit to the insurance. Using the HSA does have the intended effect of making one very aware of how expensive medical care is, and where the hidden costs are.
TL;DR – HSA is much more powerful than FSA for pre-tax benefits. If you use a lot of health care in a year, paperwork explodes. Exposes the hidden underbelly of medical billing to the consumer.
Despite the increased administrative hassle, I’m liking the HSA more than I expected. I’ll fund it heavily again this year, and hope that we don’t need to use it as much, and we can roll over a big chunk of cash for next year and beyond.
Submitted January 10, 2017 at 06:46PM by bcarton http://ift.tt/2j39hIF
