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December 10, 2007


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Hmm... Interesting

Hopefully your company engaged Empowered Benefits, a Charlotte, NC based company providing a consumer driven healthcare web portal, to help employees spend the money within their deductible wisely. With it you can determine the cost of prescriptions at local pharmacies, show you which local hospitals perform certain procedures as well as how much they charge and what their outcomes are. It can also give you the necessary information to know if your physician's charges are competitive. I don't want to be a walking, talking advertisement for them but they do provide a ton of resources for employees in your exact circumstance.

It sounds as if your employer set up the program correctly to encourage you to manage your healthcare dollars when the HSA fund was made an asset that is YOURS. You own it so make it grow. If you remain reasonably healthy in your younger years, are willing to manage your healthcare providers as you do other service vendors and invest well, this fund could be huge by the time you end your career. If healthcare costs can be forced to the bottom of your worry list when you retire - what a joy.

Awesome! I just made the decision to select my companies HSA plan for this coming year also. I like the higher deductible and lower monthly premium. At least then if I'm spending money it's because I'm using health care.

I just wish my company fully funded the deductible. They do drop in $500, but no where near as good as your full $4,000!

So your company funds your deductible, which is basically money available for healthcare at 100% of cost rather than co-pays, then insurance or whatever covers anything over $4000. So you basically have no healthcare expenses with this plan at all? Very nice.

Wow - that's great. I work for a HDHP (high deductable health plan) provider and I only know of a couple of firms that are financing 100% of their employees deductables.

I think you will see more companies move this way as we transition to a consumer driven health care environment.

Check your benefits if ALL medical costs are indeed covered 100% after you meet your deductible. For example, once I hit the deductible, only $5,000 of physical therapy costs covered by my insurance provider. Also, prescriptions weren't 100% covered either. In both cases, I still did pay the negotiated rate, and with funds from my HSA.

Also, I think you can only make contributions up to your deductible; therefore, if your company is depositing the maximum amount into your account, you won't be able to contribute. I tried looking into my HSA as another tax shelter, but because my employer fully contributes to my HSA, I can't add anymore into it.

That's pretty awesome that your company fully funds your HSA; mine does that as well. Nothing like free money.

Here's the link on the irs website on the contribution limits:

Him --

That's old info (based on 2006). Yeah, you'd think the IRS would have updated info but this isn't it. Here are the rules for 2007 and beyond:

Don't forget that he will still be paying a premium to participate in this plan. It's great that they cover the entire deductible but you must also take into account what comes out of the paycheck too.

Actually, they pay the premium too. There's no cost to me for it.

The law just changed so you are no longer limited to contributing your deductible or the statutory limit ($5,650 for a family in 2007, $5,800 in 2008), whichever is less. You can now fund the full statutory limit even if you deductible is lower, which in FMF's case, it is. Additionally, if you are over 55, you can do another $800.

The new law really loosened the rules here, so I would expect more employers to go this route. Very generous of your company to contribute the full deductible, by the way.

Wow, you seem to have one of the best plans in the country. I have something similar but they simply roll over unspent money every year back into your account. This rewards healthy, younger people (like myself) while screwing people with ongoing health problems.

Still, in my plan, after you have sapped your account you need only pay the next 2000 in charges before they pay the rest for the year. So that would mean major surgeries would only cost you 2000 max.

I love these plans as I pay nothing outside of my premiums from my paycheck. In the past too many people abused their health insurance going to the doctor for common colds and vanity visits. This forces people to be personally responsible for their own well being.

Tough love that is long over due.

Wow! A $4000 match? That is awesome! My company also does the $500 match. As a young person with few medical expenses, I love my HSA plan!
Unfortunately, I live in Wisconsin, one of only 5 states that doesn't allow HSA contributions to be tax-free. I even wrote to our governor about it, but, of course, just received a form letter back. Grrrr! Even without the state tax break, I still love my HSA :) My plan is so cheap, plus I get to save for future medical expenses. I like having more control over my health care.

Our new medical insurance has a $4,000 deductible. Yikes!
The company is going to fund $4,000 per employee per year (covering the entire deductible)! Hooray!

Wow, I'm boggled by this. This means the company is effectively self-insuring for the first $4000, which just doesn't make sense. This suggests to me that they're planning to ratchet down this support in the future.

My wife and I have three daughters. We've had an HSA coupled with a high deductable health plan for three years. We love it! Our family deductible is $4000 and my employer contributes $2000 per year to my HSA. I max out the remaining amount. We pay a small portion of the premiums for the coverage, but our portion of the premiums are only about $80 per month, versus about $200 per month for a traditional PPO plan or HMO. To date I've saved up almost $15,000 in my account, which I've invested in mutual funds.

My advice is to not dip into to your HSA if you can possibly avoid it. We've simply paid medical expenses out of cash on hand, which has allowed for the triple tax-advantaged account to really grow. (Another compelling reason to be an aggressive saver-being able to cover medical expenses out of cash on hand allows the HSA to continue to accrue.)

Having a high deductible plan with an HSA requires you to change your mindset, but once you realize how much sense it makes, it really works as a wealth accumulation tool. Besides, the old model of health insurance, where consumers have no skin in the game and insurance is provided for every tiny little expense simply makes no sense with rapidly rising medical costs. We think of our current coverage almost as if it were major medical, which makes far more sense as an insurance model.

Going at our current rate we could easily have several hundred thousand dollars in our HSA by the time we retire. We're fans of HSAs.

HSA's are fantastic, and I recommend it to all my friends who tend to be younger and single, and not have very many medical expenses. I love the fact that if you leave the employer, the money is still yours. I recently left mine, and still have a few hundred dollars in my account.

That is very generous what your employer is doing. I used to work at Microsoft, which has what most regard as the best medical plan in the country, and they weren't that generous.

Sarah --

You said: "This suggests to me that they're planning to ratchet down this support in the future."

I don't think so. The owners of the company are VERY generous with the employees -- that's why no one ever leaves. Great retainment strategy, huh?

That is interesting. I would be interested in learning how the contribution per paycheck compares to the contribution with the old plan.

I know that this is probably a great idea for companies though. I mean, I think they are paying about $300 a month for their share our family's plan. I never go to the doctor and my wife only goes like once every three to four months. If my current portion covered the insurance, the company could easily contribution $3000-4000 and break even.

Anyway, all in all, it sounds like a positive thing for all parties. I would crunch the numbers if it were available. Currently we only have choices of catastrophy (80/20 after high deductible), , "traditional" (80/20 after lower deductible, better prescription coverage), and two co-pay based plans which only differ in the amount you pay each month, the amount of the co-pay, and the amount of the deductible for non-co-pay expenses). I am on the lower co-pay plan.

FMF, Kevin, thanks for pointing out to me the new laws on HSA contributions! That's good to know for tax purposes next year.

Him - most of that applies to this year too. Also, if you have an HSA as of 12/31 this year, you are treated as having it for all of 2007, so you can effectively contribute the max (and accelerate your deduction into 2007). The only requirement is you have to hold on to that HSA for 12 months.

My employer does something similar, though only about 1/2 of the high deductible is covered by the employer-provided HSA, and the HSA is not mine to take if I leave, should I not spend it all from year to year. I cover the difference with my FSA.

The only downside for me is that my employer is also self insured for the high deductible plan, which puts them beyond the insurance laws and regulations of our state and into the no-man's-land of ERISA. I need a surgery that my employer's TPA considers expermental/investigational even though I have several excellent peer reviewed studies to the contrary, and I have no recourse because the state department of insurance has no jurisdiction, and the federal department of labor isn't inclined to exert the same oversight for the ERISA policies that the states do for the non-ERISA policies.

ERISA gives you only one recourse, to sue your employer in federal court, and you're barred from getting any penalties or damages, even if you win the only thing that happens is they're forced to provide the services. No penalties can be imposed, no rewards to you for your pain, suffering, or related losses like wages or other medical expenses. Usually you can't even get your attorney's fees paid.

I advise everyone to check carefully into the details of their medical plans, and to write their representatives and ask that the laws be changed so that ERISA healthcare be held to similar standards federally as non-ERISA policies are in the states.

I don't understand. A $4,000 deductible that the company funds 100%, and they pay 100% of the premiums? The $4,000 the company contributes is yours to keep if unused? You know what they say about "if it sounds too good to be true......."

Mike --

In most cases, that is true. Not sure yet with this one as it's still new to me (doesn't take effect until Jan. 1.) I'll certainly give updates along the way.

I wish my company would change our insurance to an HSA. This has been appealing to me for sometime. My wife and I don't go to the doctor very often so the high premium doesn't bother us. You certainly got a good deal from your company, though! I hope more companies choose this option. It leads to more choice for the employee.


A couple of things to keep in mind with HSAs...

1. Does the $4,000 deductible cover the individual deductible amount or is that the family deductible amount? Typically, a deductible will be expressed as two numbers (i.e. $4,000/$8,000). The first number is the deductible for an individual and the second number is the family deductible. Since you are taking family coverage in a High Deductible Health Plan, your total liability may be $8,000.

2. Under the Rx coverage, enrollees are many times responsible for copays after the deductible is met.

3. If your plan allows for out-of-network coverage the deductible may be higher for those services. Also, any charges above reasonable & customary will not accumulate towards the deductible.

I hope that is helpful.

Boy, I wish my company would do this.

Here's hoping that none of you asking for high deductibles don't get a chronic disease.

FMF - That retainment plan looks great. But IBM never fires employees without cause either, right? Oh yeah. At least they didn't, until the going got tough. This is a great way for companies have the capability to drastically reduce expenses while still appearing to offer the same health plan. It looks great on the balance sheets since costs go down while intangibles like employee retention looks like it should stay the same.

Rob --

1. The $4k includes the family deductible. The single person deductible is $2,000.

2. Yes, this is the way our plan is as well.

3. Not sure if the plan allows for out of network, but our doctor is in network, so we're fine for now.


Sounds like you have a generous employer.

One other thing I forgot to mention on my last might want to ask your employer if you can establish your HSA account at your own bank. For example, my employer had an HDHP with Oxford HealthPlans (subsidiary of United Healthcare). Oxford has an arrangement with Exante Bank that has relatively high fees. As an alternative, I was able to set-up the HSA with C***bank and, since I had enough money with them already, there were no fees. It might be worth it to explore alternatives.

PS. I found your website about 3 weeks ago and I think I've visited it everyday since then. Keep up the good work.

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