Medical Savings Account (2)

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When A Medical Savings Account Is A Smart Choice

Nowadays prices are on the rise. In fact, has there ever been a time when they were not Not lately. As inflation soars so does the possibility of the average person to have medical coverage diminish. The truth is that medical insurance and other similar matters typically take a backseat to be able to more immediate requirements, such as food and also rent. Yet when money could be saved, it’s important that at least some of this go towards any medical savings account.

Any medical savings account is surely an option to purchasing medical insurance. It is usually utilized by youthful, healthy adults who don’t foresee illness anytime in the near future and can’t or won’t set money towards medical insurance. While those who simply can’t afford insurance tend to be ubiquitous, the people who won’t pay money towards medical insurance have a different take on life. Their belief is the fact that by holding money in the medical savings account they will have money should an emergency existing itself.

Further, they think that should another form of pecuniary problem occur, such as the need to purchase food after being laid off from a job, the medical savings account can also help them out, since it is simply a pool associated with money -albeit earmarked for medical purposes, but ready to accept other emergency-related needs, although only in the many extreme cases.

Needless to say, there is some quality to this philosophy, even though most people would jeer at such thoughts. The main reason for this is that medical bills may accrue quite rapidly for some situations, thus barring the possibility of a mere family savings bailing them out.

Nevertheless, there is one situation where such a bank-account can be helpful over healthcare insurance. If a person is independently prosperous, there is not much purpose to put away any kind of money towards insurance simply retaining money in the bank makes the the majority of sense. Yet again, this applies mainly to wealthy people, not to the average person, who would do better to accept the gamble that they might be injured or turn out to be sick and require medical coverage.

Comments: 32

  1. Rene March 26, 2013 at 2:17 am Reply

    About 5 months ago I paid off all of my outstanding debt (credit cards, overdue bills, medical bills, etc…) I now want to purchase a new home. How can I raise my credit score so that I can get a great quote on a mortgage loan?

  2. Edison September 1, 2013 at 3:19 pm Reply

    I just need to know what are the steps to opening an account and making an investment in a 401(k) plan, thanks!

  3. Gwyneth September 26, 2013 at 10:13 am Reply

    http://Www.petsvpi.com they recently started this up at my work, i quoted my two american pit bulls for 60 a month? Is that an average monthly payment? I got the best plan but kind of upset they dont cover collapsed trachea… I have a 2 yr old very healthy 110 pounder and. 4 month old small girl also healthy just want coverage be4 anything comes up.

  4. Marcelene September 28, 2013 at 2:20 am Reply

    I have a basic question about credit scores. When the economy first went downhill back in 2009 I ended up with bad credit after loosing my job all in one day due to the office closing with no warning.

    I am trying to get my score back up to 650. Currently it is about 590. Here is my questions:

    1. If I have two credit cards that are charged off and can pay them off today would that be the best route?

    2. If I have a repossessed motorcycle and owe around $3,000 after it was auctioned off would that be the best thing to pay first?

    3. Or is qty better, excluding medical? In another words, If I could pay off 3 or 4 other minor things would that improve the score more?

    Thanks!

  5. Albert October 26, 2013 at 1:26 am Reply

    I am 18 years old and want to start saving for retirement. I am 100% debt free, and have built up about $4500 in a savings account in only 8 months. Where and how should I be saving money for retirement? I don’t know if my job offers any 401k plans or anything. Thanks.

  6. Virginia February 2, 2014 at 10:44 am Reply

    I have a 2007 HSA already, so I believe all of the expenses for 2007 are qualified to be paid for by 2008 funds, is this true?
    Just to add details in case anyone comes across this, I started my HSA on January 1st of 2007 and put in enough to get a 50% company match, which covered my deductible that I met for 2007. I still have outstanding bills I will be paying from the end of 2007, so I upped the HSA amount to pay for that and cover/save for 2008.

  7. Willie February 22, 2014 at 6:52 am Reply

    Is there any medical insurance in India which covers pre-existing decease also? Please give me details

  8. Billi March 11, 2014 at 8:57 pm Reply

    I am 18 and I live in alabama and I really need to know what some good cheap medical insurance any suggestions?

  9. Weldon March 28, 2014 at 5:12 pm Reply

    …holding them up to 13 weeks?
    Employer would hold up to 13 weeks of HSA contributions. I complained about this repeatedly. The problem would reoccur or nothing would be done. The president of the company also contributed. (I believe that the company was using the held contributions for short term cash). Doesn’t this violate Section 125 of the HSA act? He being a high-salaried employee is benefiting from this at the cost of other employees in the HSA plan. This had been happening for a period of over 2 years.

  10. Modesto April 9, 2014 at 9:25 am Reply

    We now have the option to sign up for a High Deductible Health Plan with Health Savings Account and I was just wondering if this is the jist of it: We pay into the HSA each pay period and use this money for medical related expenses throughout the year – should we ever reach the $2500indiv/$5000 family deductible, insurance will began to step in?

    I am still looking into if we’d be saving money by taking this type of coverage, I just wanted to know if I was understanding the HDHP with HSA or am really of course. Thanks to any clarifications in advance!

  11. Rhett April 9, 2014 at 6:42 pm Reply

    Including health insurance premiums, co-pays, deductables, pharmaceuticals, dental work, medical services not covered by insurance, all the way down to band-aids?

    I figure that it will cost me about 5.5% of my personal income and 4.1% of my wife’s and my combined income this year. Not bad. Not complaining.

    However, my co-worker who is the sole breadwinner for his family (wife +3 kids) will spend about 31% of his gross income on health related expenses.

    I know I will pay more if we reform the system, but he won’t.

    What percentage of your gross income do you anticipate on spending this year and do you support health care reform?

  12. Rochelle April 10, 2014 at 9:10 am Reply

    I have a few questions concerning Form 8889.

    1. If I have my employer subtract $10.00 from each of my paychecks to invest in my HSA, can I deduct $260 on line 2 of this form? My employer’s contribution is $1000, and I listed this in line 9 of the form.

    2. I received a 1099-SA, and there was an amount of $525 in box 1 of that form. I understand I need to put that amount in line 14a of the 8889 form, but can I also list the $525 in box 15 if I used 100% of this $525 for qualified medical expenses? Box 16 would then by zero, which I assume it should be since I used the entire amount for medical expenses.

    Thank you so much. I have the rest of my tax forms ready, but this Form 8889 is really confusing me.
    I stated the first part of my question a bit confusing. The $10 I contribute bi-weekly to my HSA is through payroll deduction (that’s the $260 amount I was going to put in line 2). Line 9 is directly from my employer ($1000). In this case, is the $260 from payroll deduction something I cannot list on line 2 since it is from payroll deduction?

  13. Keven May 12, 2014 at 5:33 am Reply

    So I put money in my Flex Account all year and I have some hundred dollars left. My employer has been taking it out of my check and giving it to the Flex program.

    So the money is taken out already from me, the employer doesn’t have it, does the Flex program get to keep it if I don’t use it all? The answer is obscured everywhere with the “use it or loose it”, but who am I loosing it to? It doesn’t just vanish. It’s got to be in someone banking account.

  14. Tiffanie May 13, 2014 at 7:25 am Reply

    my bank is the us bank. i am 12 years old and i have a savings account, i need some money for christmas and i am wondering if i could take out some money. if i can is their a limit?

  15. Xiao May 14, 2014 at 6:09 am Reply

    Let’s say that I sign up for a HSA through my employer and later on I figure out that it is not a good deal for me. Can I cash out the plan just like a savings account? I was told two things…1. That the money stays in the account forever and you can’t use it on anything else aside from health/medical related expenses. 2. That you could cash the HSA out similarly to a 401k or IRA but take the penalty and also pay the taxes on it.

    I don’t mind the 2nd option, but the first is the problem. I figured the HSA would be very similar to a regular savings account except you can only use it for medical expenses, but I really need your help in figuring out HSA’s and the do’s and don’ts.

    Thanx

  16. Wilfred May 14, 2014 at 2:48 pm Reply

    I’ve read the wikipedia, IRS site, etc and still have questions. An answer to even just part would be greatly appreciated:

    1. I’ve read the yearly limit is around $2900, is that CONTRIBUTION limit or a BALANCE limit?

    2. What is my (essentially) lifetime limit? In other words, if during year 1 I spend $0, then by the end of year 2, I could theoretically (if nothing changes) have a balance of $5,800, correct?

    3. If I have some kind of emergency and need to tap into that money, HOW do I pay the tax/penalty on it?

    3b. How much of a penalty are we talking about?

    4. Considering my HDHP has a $3000 yearly out of pocket maximum. Can the Health Insurance carrier ‘see’ my other costs (that it will not pay anything for), such as lasik, and can that be subtracted for my out of pocket maximum purposes?

    4b. So this must mean that my insurance company somehow can see my HSA balance and transactions? That doesn’t seem to make sense.

    5. How closely does the IRS watch?

  17. Dell May 15, 2014 at 4:05 pm Reply

    IRS publications say “Certain educational institutions located outside the United States also participate in the U.S. Department of Education’s Federal Student Aid (FSA) programs.” But they don’t say how to tell which ones participate.

    Our children are not yet at college age, so we don’t yet have specific educational institutions in mind. We’re more interested in whether such participation is widespread or rare, so we can decide whether to continue funding their accounts.

    Can you help point me to an authoritative source?

  18. Ray May 15, 2014 at 5:46 pm Reply

    does anyone have any idea on what to do when u have no medical insurance and you have a ongoing medical problem? my mom was hurt at work and is fighting a workers comp claim, and her insurance has been cancelled… but becuz she was hurt at work, she is still trying to find out what is wrong with her and she cant go see any doctors cuz she has no medical insurance. shes filed for medicaid and shes been denied, shes appealing now but in the mean time, what should she do? shes in a lot of pain and her existing meds are making her stomach hurt and shes now having bloody stools. im so lost on what to do now!!

  19. Wilber May 18, 2014 at 4:32 am Reply

    I need to decide on my next years FSA amount but I’m having some doubts. I’m planning to contribute $2500 for 2011. Also, I’m planning to change the job by mid of next year. My doubts are

    1. If I change the job by September 2011 and if I have balances in my FSA account at that time, is there any way to get the remaning amount?

    2. I understand any pending amount in my 2011 FSA would be carry forward to next year(2012). Is it correct? If I change the job at the beginning of 2012. Is there any way to get that carry forward amount.

    3. Otherwise, say like If I don’t apply for FSA and spend like $1000 dollars for medical. Is there any way to get tax benefits for this amount.

    Any advice would be appreciated.

  20. Luis May 18, 2014 at 2:40 pm Reply

    And are you able to afford payments now (after medical school/residency since you can defer during then).

    My problem is, my mom took out parent plus loans because they were easier and had lower interest rates. I know they can be deferred while I am in school but I never want her to have to pay them. I know they are in her name but I want to be able to give her the money when I start working so she doesn’t have to pay. As a new medical student, could you afford to do this?
    I meant to say, as a new medical doctor, could you afford this?

  21. Felton May 24, 2014 at 4:26 pm Reply

    My husband has way more money in his HSA account than is in mine and we are currently paying off (in advance) the costs of the birth of our child in August. It would be really convenient if we could use both of our accounts to pay on this since mine will be about $700 short of the total bill. Thanks in advance!

  22. Chas May 24, 2014 at 6:07 pm Reply

    How do the deductibles work? Are they annual or once you have that amount in the account, does it carry over from year to year?

  23. Lance May 31, 2014 at 12:55 pm Reply

    Why would any sane person invest in savings bonds?
    If Obama wanted to do something constructive for a change I have a few ideas. This would generate a lot of federal revenue and help the gubmint pay off some of this crazy spending they have been doing.
    1. pay face value for a savings bond. Have the bond accrue value at say 1% per year up to 10 years. then it gains no more interest. but it could be held and used tax free for education or retirement indefinitely.
    Make it where it could also be used tax free for medical procedures or in hardship cases, such as a disabling illness Etc.. I’m just looking for ideas to put money in Americans pockets and help bring some of the national debt.
    I know that it’s a longshot but I think it’s better that just belly-acheing about it.

  24. Irving June 2, 2014 at 12:38 pm Reply

    A friend of mines mother passed away due to medical conditions. She had money in both her children’s name in a savings account. The sister emptied the funds and will not give her brother his share of the money. ($50,0000.00) He does not have enough money to hire a lawyer and is also in the process of loosing his home. Does he need a lawyer or can he just take her to court for the $25000.00 that he was supposed to get.

  25. Rosaria June 2, 2014 at 3:37 pm Reply

    I’m 20 years old I just got hired on by layne Christensen I am receiving their blue cross medical insurance and have a chance to sign up for hsa I don’t really understabd what it is and what it does. Is one worth it and what does it do? I am 20 going to be 21 in March I have a 2 year old daughter and a wife would it be smart to sign up

  26. Donita June 2, 2014 at 5:07 pm Reply

    when i went to apply for public assistance and rent assistance, the government gave me a bank statement showing these 2 “seperate” accounts with $80,000 in each of them!! its a trustfund account and my dad is the payee.. he owns his own medical buisness in the south but when i askd him about it he said he dosent know what im talking about.. also, these 2 trustfund accounts are from crosslands savings bank (which closed in 1992) but theres activity on 06/09/10 just 3 mponths ago! what do i have to do to claim the money and how.. thx for your much needed help.(mayb i can send you a reward if you giv me ur email lol)

  27. Graham June 5, 2014 at 1:51 pm Reply

    I just started a new job and am eligible for a qualified high deductible insurance plan with and HSA. It sounds good and all but I have several concerns and am not sure if it is the right plan for me. I know the basics of how they work, I’m just not sure if I should get one or just go with a traditional insurance plan.

    1. I don’t have any extra money to pay for the high deducible even for small expenses such as going to the doctor for a cold or minor injury let alone should I need to go to the ER or something major.
    2. I have no money to deposit into an HSA so what is the point of having one other than for tax benefits?
    3. I have a 2 month old baby who is currently on Medicaid for a year but we all know that babies get sick A LOT so I might be paying a lot of medical expenses if that happens once her Medicaid is up.
    4. My employer is taking 15% of my paycheck to pay for insurance regardless of which plan I get so would it be worth it?

    I myself never go to the doctor for anything but again I do have a baby that will possibly go to the doctor a lot. Any info would be helpful thanks.
    I forgot to add that my employer has the plan available but doesn’t currently put money into the HSA. And the reason for the 15% is because I’m an hourly employee whereas most of my colleagues are on salary. It’s a school so mine is a little different because of having summers off.

  28. Jocelyn June 7, 2014 at 3:59 am Reply

    I need to diversify my portfolio, and one thing I lack is any exposure to health/medical/biotech.

    I need a stable company with a decent dividend. I was thinking PFE because it’s at a pretty low price with a 7% yield. I like CELG and DNA, but I really want stocks with dividends.

    *Note: my IRA is in diversified index funds. This portfolio I am addressing is a different discretionary account I use for “fun”, where I seek stable values and decent yields to compete with savings accounts.

  29. Emmett June 7, 2014 at 11:54 pm Reply

    Thanks to King 0bama striking fear into everyone (including insurance companies) with regards to how much 0bamacare is going to cost and suck, instead of regulating insurance companies, my employer is now moving to a High Deductible Health Plan. Essentially this means I have to pay at least $2,000 in doctors bills before insurance pays anything — for me this means I will be paying 100% for all of my medical expenses every year, unless something catastrophic occurs. Ahh, gotta love that hope and change.

    Anyways as part of this ridiculous plan, I have to open an HSA account. I get to play accountant tracking all receipts, ensuring all purchases are permissible.

    I’m looking around at banks that offer HSAs and so far all of them seem to have a quarterly or yearly fee associated with them. WTF? Do any banks offer free HSA accounts? After all, the banks are the ones using my money to make money. I’m not looking for interest, just for a bank that offers a free account.

    I’ve had just about as much hope and change as I can take. I know things are just going to continue flushing down the toilet, but perhaps after the 2012 election things will be brought back on track to a point where the working class isn’t screwed as much as they are today?

  30. Damion June 8, 2014 at 11:02 am Reply

    I’m getting a new job and this Company offers a HSA. I have never heard of such a thing. I have always had the typical health insurance. Can any one explain what is a HSA. Is it bad. I have a family and was wondering if this a good idea to join or go on my own.

  31. Clelia June 19, 2014 at 12:11 am Reply

    me and my sister needs to get our labs insurances sorted out before he injures himself or becomes ill. we have a savings account for our pets we have 2 rabbits and a lab it was mainly for the lab to save money for his insurance but were using it for the rabbits as well in-case they need a new hutch or something. my sister says just use the savings account instead of the insurance but i think insurance is best but still use the savings account as well.

    what do you think is better using the savings account or get insurance for him?

    also if you choose insurance can you suggest any insurance companies?

    Many Thanks

  32. Danilo June 19, 2014 at 12:13 am Reply

    I have had a Health Savings Account and HSA medical plan since 2008. Can I switch back to a non-HSA medical plan and still leave my money in my HSA bank as long as I don’t take the funds out?

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