Health Insurance?
Saturday, December 6th, 2008 at
7:04 am
oshunn1 asked:
I may be accepting a job that does not have health insurance. What are the disadvantages of having an individual health plan? What is an HSA and how do I get one?
I may be accepting a job that does not have health insurance. What are the disadvantages of having an individual health plan? What is an HSA and how do I get one?
Tagged with: Health Insurance • Hsa • Individual Health
Filed under: Health Insurance
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I have an individual health plan. It costs about $105 a month, but there’s a very high deductible. Basically, it’s in case of something going really wrong. Otherwise, I pay my own costs myself. The disadvantage is that you pay your own way. An HSA is a separate account that you put money into and you pay for your health costs out of it — it’s money before taxes, so it lowers your taxes. I don’t know how to get one, though, sorry.
Individual plans may have higher premiums compared to group plans. Do you belong to any professional associations or social associations, maybe a union, sometimes group health insurance plans are offered through associations.
You can contact an Independent Insurance agent in your area for quotes on individual policies. Also, try local referral services (hotlines), sometimes low cost insurance is available.
I have a group insurance plan and a HSA. We use the HSA for deductables and things not covered by insurance. There are tax advantages to having an HSA, however, you have to make sure that you use all the money you put into the account each year or you lose it….which I think is stupid, but I’m only one person…;)
As someone with private health insurance, I can tell you that the biggest disadvantage is cost. Monthly premiums will be much higher than with group health coverage, not to mention higher copays and prescription plan prices.
As far as the HSA question, a bank or credit union can help you establish one. Not all financial institutions set up HSAs, so you may have to call around to see who in your area can help you with that. You can find everything you want to know about them at
We recently had to cancel our individual health insurance because it was too expensive and barley covered anything. I have never heard of HSA so i can’t help you there, sorry.
We have an HSA and love it. BUT we don’t go to the doctor’s office except for routine checkups. If you are one who goes to the doctor a lot, then an HSA is probably not for you. Truth be told, we were most interested in an HSA because we could use it to pay for braces. We also felt like we would finally be getting true use out of our health insurance.
An HSA does NOT have to be used up by a certain time period; that would be a FSA. Our account and the money in it is ours, even if we cancel that particular health plan. It can even be invested after a certain amount has been accumulated. Our HSA also earns interest (3.87% at last chek). We can buy over the counter meds , contact lens solution, and many other things with our HSA.
It is worth the time to thoroughly check out HSA as an option.
The biggest disadvantage, is that they don’t have to TAKE you. Once you get on a plan, great. But if you have stuff wrong with you, depending on what it is, you might not find ANYONE willing to give you health coverage, at ANY price.
An HSA is a special type of savings, checking, or investment account as follows:
1. Contributions can be deducted on your taxes (unless they are made with pre-tax dollars through payroll deduction)
2. Withdrawals used for qualfying medical expenses are tax-free
3. Withdrawals not used for qualifying medical expenses are taxable and subject to a penalty.
4. Your annual contributions are limited to a certain amount, which is calculated based on the number of months on whose first days you (1) had an HDHP and (2) had no health insurance other than HDHP’s.
An HDHP is a health insurance plan that meets certain criteria, including having a high deductible.
To get an HSA, first get an HDHP from a health insurance company. Then either
(a) go to the website of a place that offers HSA accounts (mine is at First American Bank in IL even though I am in CA; you may select another) and open one online. You will be requested to send (at your own expense) copies of your identification by e-mail, fax, or mail.
(b) go in person to a place that offers HSA accounts; they will photocopy your identification at their expense, but you will pay your travel expenses.
Ok. Throw out all the answers except this one and StephenW’s. This is what I do.
The biggest disadvantage to an individual health plan is that you must qualify for it. If you’ve got ANYTHING in your background, ESPECIALLY prescriptions, you could be declined. Secondly is possible cost. You didn’t put your age down or sex, but if you’re a healthy 18-34 year old male, it will be relatively cheap. If you’re a female in the same range it will be more. Why ? Because women take better care of themselves ! (you guys go for regular checkups and have more ‘inside’ parts that need checking, which cost money). Also, depending on your state (insurance is STATE-run) most individual health plans don’t have maternity but must cover complications of pregnancy…which could be millions ! An HSA is good if you are in a high tax-bracket. Otherwise, I wouldn’t bother. The reason is, the attraction for the HSA is that you can put money away into an account (see StephenW’s answer) for your medical expenses (as well as dental, vision, etc whether or not they are covered by insurance) that gets interest and you can write off the contribution. Kinda like a medical IRA. But if you don’t have the money to pay a high premium, you probably won’t have the money to contribute to the side account. The reason an HSA is cheaper is because your deductible is higher. But, the government put limits on how high that can be which limits how much you can save. SO, Here is what you should do:
Find a high-deductible PPO plan with copays for services like doctor visits and prescription coverage. Also, check to see if wellness is covered and up to what amount ($150-$500 a year is typical). Going this route, you will have coverages for things you’re probably going to need on a regular basis (like doctor visits and prescriptions) while still having catastrophic coverage. But here’s the neat part….by having a PPO, you will get mega-discounts on services that aren’t covered by copays. What’s that you say ? My real-life example is as follows: My outpatient knee surgery cost $25,000. The discounted rate was $2000 ! So, if I had a $5000 deductible, I would have paid only $2000. So, even though the insurance company didn’t pay a dime, I saved $23,000 !
Of course, there are innumerable variables. I would be happy to answer questions on a friendly basis as opposed to an insurance broker basis (laws and stuff like that). Feel free to email me.