Health Savings Account Explained

Health Savings Account Explained. Let's go over what makes up an Health Savings Account and how you can best utilize this great tool. An HSA is one of the best financial tools out there with a triple tax advantage! Study financial planning and one of the first tools that will be provided is the financial planning pyramid. The base of this pyramid will be "Protect" before you can move up to other planning objectives. Our discussion will help you understand the different types of insurance that can provide that much needed peace of mind. Leave your comments and questions below!

[viewera]

The newer shows are a bit more polished. Its great to see Brian go full on financial nerd in these older ones.

[chineseslaves]

Don’t forget employers often pay half of the deductible and while in deductible you get negotiated rate. Excellent savings vehicle with healthcare built in, most are just immediately turned off by the high deductible and don’t educate themselves on it. After employer contribution and upfront tax break that pays for the deductible. People need to know this about finances...it’s all about having the money upfront which means financial discipline. If you don’t have it upfront you can’t get all of the deals that come after that. You put yourself in the position of power, no one else is going to do that, including some marital partners.

Well being only sounds glamorous. The truth is the opposite. It’s more work, thought and effort. It’s not easy to hang in there in our workplace where people work against each other, especially when they focus on their money vs others. That’s for them to be brave enough to handle with their employer which plenty won’t do, so they hurt org and others in it by not doing all they can for it’s success. It’s petty and disgusting and limits the functioning of it. I’ve had them admit they look at what others make, yet they chose to leave the area because they thought it would be unpleasant. Only for those not creative and appreciative. It’s paradise if you are, but you also have to be brave...a characteristic not valued in a dysfunctional environment and not that common. You can’t be small minded to get wealthy, but you will have to work with them, and they are trouble.

[joshuascott]

Hey guys, so I've decided to begin taking advantage of the planning opportunity you spelled out. Cash flowing medical expenses out of pocket can add up quickly, but I totally understand the power of exponential growth if you can leave that HSA alone for 10-20 years while continuously invested. We use Anthem for our HSA and they even have a slick auto-invest feature (with Vanguard Mutual Funds) that I have signed up for. I've been maxing my HSA contributions for years now but also taking large distributions as I incur expenses. This should be interesting to see the account take off when distributions are stopped.

As far as keeping records, I have a spreadsheet I created and have been scanning in all my medical receipts. I'm not sure why you need the EOB's Brian, perhaps you could elaborate. The itemized receipts should be good enough proof, no? I'd also advise keeping electronic records (scan the items). Ten to twenty to thirty years can wear on paper receipts and some like CVS's ink will just disappear off the paper. The nice feature about a spreadsheet is 10 years from now I can just quickly glance at the total and cut myself a big fat reimbursement check. :-)

Finally, is there a potential ADDITIONAL planning/advantage at work here? In the past, TurboTax has asked me, "Did you spend more than X this tax year in medical expenses?" I've always said no because I knew I had reimbursed myself from my HSA and the IRS doesn't let you double dip. Well if I am now paying thousands of dollars in medical expenses out of pocket, do I qualify for a deduction at a certain expense level, even if I intend to reimburse myself 20 years (of whatever future date) later? Am I over-thinking this? lol

Love it all guys! Keep doing what you do!

[hungrypersian]

What happens if you don't have a high deductible health insurance plan and you opened an HSA? Do you need to withdraw your money and close the account? What happens to the growth from the account? Any advice would be appreciated.

[briannelson]

At 4:31 - "Now you're going to pay income taxes on the gains." Correct me if I'm wrong, but you would actually have to pay income taxes on both the gains AND the contributions (if not used for a medical expense). And a follow on scenario just because I'm curious. A married couple makes $25, 000 in one year. At the end of the year they have $1000 that they contribute to an HSA (or Traditional IRA). Since the standard deduction is more than they make, they're income tax is already 0, so the contribution effectively doesn't do anything for them. They do not invest it, turn 65, and then withdraw it for a non-medical purpose. Let's say they now fall into the 10% bracket. If I was correct above, they would be taxed on this and end up with $900 as opposed the $1000 if they never put it in at all. I know this is an unlikely scenario, but am I correct?

[violinpiano]

Bryan spitting every damn where when he talk.

[teambigv]

If you have a high deductible Obamacare plan with a HSA attachment can you take off the HSA contributions to reduce the Obamacare plan premium cost?

[Convexhull]

Is HSA worth it if you're starting out with a low income/young adult?

[reniehandler]

Are you saying that you pay for your own medical expenses out of pocket now and then withdraw from your HSA later to pay yourself directly for those previous expenses? Are you able to do that without any penalty?

[malvizar]

How is the contributed money pre-tax? Do I need to set it up with my employer to deposit money from my paycheck? Or when I file my taxes for the year I report it and I get the tax credit that way?

[datvo]

I've been looking into using an hsa new open enrollment. Sold. I noticed that a lot of hsa providers have apps with the ability to take pictures of the recite and stores them for you. would that be enough? secondly could I, in theory, open a saving/checking account/credit card (paid off monthly) for the sole purpose of hsa eligible expenses, would that work or I would need a detailed recite?

[kc]

can I exclude myself from my husband health family insurance and open a HSA by myself

[jojo-ebib]

If you leave the money in your HSA will it grow by itself or do you need to put it in a mutual fund

[jeremy]

I have Tricare Reserve Select, so, I don't believe I'm eligible.

[bguen]

Taking current year reimbursement 5 years later is not sound financial advice because you are throwing away the growth from that point forward, and you WILL have all kinds of medical expenses after 65 starting with Medicare Part D even if you're perfectly healthy for a while. And, like they said, you can use it as just another pre-tax retirement account *that has no minimum withdrawals*

[madcowusa]

This country make this crap too complicated. Who makes this shit up? Trying to finish taxes and wife's HSA pittance is causing me hours of research.

[LordTrayus]

HSA's sound great in theory until you realize that even a couple hours at a hospital costs upwards of $10K. So assuming an average deductible of $5k and an 80/20 coverage afterwards, that's a $6k hospital bill you have to cover. That's 2 years of HSA contributions...we're talking pennies here in the grand scheme of things...

[overrunwithboys]

Been watching many videos on these HSA's & dismayed to learn neither myself who has a Deductible for Individual $2, 500/ $5, 000 for Family, and also SON who is single with a VERY HIGH Deductible of $7, 000 did NOT QUALIFY !! There is a list of qualifications that many you tube videos do not explain, in his case, he went and signed up for one of these putting $3, 000 in it - only to learn the next day, his lousy FREAK high deducible plan didn't qualify.