I tell my clients that in the long run you cant lose with HDHP's - but that is hard for them to believe after they get a 27% rate increase (BCBS of SC in 11/07) but I am still a believer. 96% of my clients are on qualified plans.
1. BCBS (best network and maternity)
2. Golden Rule
3. Humana (easy underwriting and low hdhp rates) - my main gripe with Humana is that the provider search function on their web site is terrible. Sometimes you have to look them up by name, sometimes a provider isnt in there by name but the practice is, but never search by specialty!
4. Carolina Care Plan (Medical Mutual of Ohio)
5. Assurant
What companies are you writing the accident and critical illness with? Does anyone know of any institutions that have stand out HSA's?
Surely many of you have thought of this but one of my clients has convinced me to not use the money in my HSA. Of course, only if you have a decent brokerage option. Just max it out, pay cash and save my receipts. As it stands right now there is no limit on how long you can wait to reimburse yourself, so when that changes or i need the money I'll just write myself a check. This way it is growing tax free and I'm not blowing the money elsewhere. Any of you been doing this.
You lost me about not using the money in your HSA. When you use the money for qualified expenses it's tax free - not tax deferred. Then you simply replace the money.
I see no benefit with paying for qualified expenses out of your pocket and letting the money grow tax deferred. They can get the same tax deferred benefits with a SEP or Keogh so it's not like biz owners don't have places to grow tax deferred investments.
------------------------------------ Health Insurance Agents: Training, Support, Discounts, E&O for $440 www.ihiaa.com
That would be only if they are already maxing out their other accounts. It's more of a talking point than anything else. Because it grows tax deferred. The idea being you will have more when you retire because of the tax advantages. It's definitely not for everybody.
That would be only if they are already maxing out their other accounts. It's more of a talking point than anything else. Because it grows tax deferred. The idea being you will have more when you retire because of the tax advantages. It's definitely not for everybody.
It's just poor advice not to use your HSA account for eligible expenses. And you can put $15,000K in a SEP and $25,000 in a Keogh - doubtful they'll max out those tax-deferred vehicles.
If you're paying expenses out of pocket and you have a HSA you have a complete lack of financial understanding.
The BIGGEST value a HSA offers is using tax FREE money on eligible expenses. I really hope you're not telling your clients not to use their HSA money. Horrible advice.
There are people that max out those vehicles, most definitely. Not a lot but some and if you're talking to someone that is somewhat savvy it's another concept.
I believe your statment about a lack of financial understanding is not correct.
We're not saying that we're recommending they do not use that money for medical expenses. The IRS code does not give a time frame on when you spend the money. Therefore, if you have an expense in 2006 and it's now 2021 -- if you can produce the receipt you can use that money in 2021 for that expense that was incurred in 2006. In the meantime, it's grown tax deferred. ($1,000 over 15 years 6% has grown to almost $2,500.) Again, it is only for people that have the cash flow. They are still using the money for medical expenses just in a different year. Like you say the biggest advantage to an HSA is using TAX FREE money on eligible expenses. Doesn't matter when you use it!!!
Originally Posted by healthagent
It's just poor advice not to use your HSA account for eligible expenses. And you can put $15,000K in a SEP and $25,000 in a Keogh - doubtful they'll max out those tax-deferred vehicles.
If you're paying expenses out of pocket and you have a HSA you have a complete lack of financial understanding.
The BIGGEST value a HSA offers is using tax FREE money on eligible expenses. I really hope you're not telling your clients not to use their HSA money. Horrible advice.
That was an example. There are many choices when investing once you get above a certain amount in the accounts. The return is not the point. It's another way to take advantage of tax deferred growth.
HSAs are not designed to supplement retirement. In fact, in most cases, you don't want to keep a lot of excess money in them...assuming you are getting a better ROR on your other short/mid-term investments.
"There is no time limit as to when you can reimburse yourself for your health care expenses; you just need to keep legible receipts and records in case you do reimburse yourself or if you are audited."
"You decide whether and how much to spend from the account for your medical expenses, whether to spend out-of-pocket or to save the HSA money for the future. Just like a 401(k), earnings that compound tax-free for several years have the potential to grow exponentially into a supplemental retirement nest egg. After age 65 (or if you’re disabled), funds can withdrawn for non-qualified expenses without being subject to the 10% penalty, but ordinary income taxes still apply."
HSAbank.com allows a client to use mutual funds after a certain level is reached so I believe it "might" be possible to get the same returns with tax advantages as they are in other accounts.
Assuming you are getting a better return elsewhere and you don't have everything else maxed out. Tax advantages can make a few % points difference in return.
Also, if we are going to need a extra $200,000 to $250,000 after we retire for medical expenses it is a great way to invest for the future. And I do believe they were in part designed for that purpose not just for ongoing qualified medical expenses.
Originally Posted by CHUMPS FROM OXFORD
HSAs are not designed to supplement retirement. In fact, in most cases, you don't want to keep a lot of excess money in them...assuming you are getting a better ROR on your other short/mid-term investments.
That was an example. There are many choices when investing once you get above a certain amount in the accounts. The return is not the point. It's another way to take advantage of tax deferred growth.
I don't follow. Under your method return is the entire point. Your system collapses if the return is say 2.9% (probably the average HSA return - or less) since it doesn't keep pace with inflation and their net return is zero.
CI & accident plans are mostly fluff to increase agent commissions . . . especially CI plans. Admittedly, I have not looked at CI in a while so there may be some new plans. The ones I saw as late as last year leave much to be desired. The likelihood of ever collecting is quite low. Loss ratio's on these kind of plans are in the 40% range which tells you there is a lot of xs premium built in to them.
Accident plans are a little better if they are not expensive. Better if you are the type person who spends more time in the ER than you do at Burger King.
Of course an accident plan will pay $0 if you are in the ER due to a heart attack . . . .
HSAs are not designed to supplement retirement. In fact, in most cases, you don't want to keep a lot of excess money in them...assuming you are getting a better ROR on your other short/mid-term investments.
Good point.
I advise clients to keep no more than a year's deductible in their HSA account. Reason: FLEXIBILTY.
If you need to get the money out for some reason (trip to Vegas?), first you have to pay tax. Not a problem since you took a deduction for it.
The 10% penalty - that could be nasty.
------------------------------------ Don't steal - the government hates competition.
I think my 3 clients that had heart attacks last year and received a check for $50,000 would disagree with the fluff comment. Look at the statistics on bankruptcy and unpaid medical bills. A lot of those people had some kind of medical insurance. Premiums are not that high and most people now recover from a major illness but struggle financially because it takes a while to recover. Brother-in-law with pancreatic cancer, wasn't supposed to survive, had a CI policy and is thrilled with the benefit. They would have had to declare bankruptcy if it hadn't been for that policy. Instead, they kept all their bills current and were able to spend time together when he was ill. And yes, just like Patrick Swayze he wasn't supposed to survive. He's 6 years out now and doing great. But was extremely sick for a year.
Do you tell people that DI is fluff as well?
Originally Posted by somarco
Paul -
CI & accident plans are mostly fluff to increase agent commissions . . . especially CI plans. Admittedly, I have not looked at CI in a while so there may be some new plans. The ones I saw as late as last year leave much to be desired. The likelihood of ever collecting is quite low. Loss ratio's on these kind of plans are in the 40% range which tells you there is a lot of xs premium built in to them.
Accident plans are a little better if they are not expensive. Better if you are the type person who spends more time in the ER than you do at Burger King.
Of course an accident plan will pay $0 if you are in the ER due to a heart attack . . . .
Life insurance has a very low pay out as well, is that a fluff product?
$10,000 accident plan on a family with 4 kids, daughter blew her knee in basketball, had to have surgery. Accident plan reimbursed $10,000 minus a $250 deductible the rest of the year the remainder of the family went to the doctor at no charge. HSA, Accident and Critical Illness. And actually when someone takes a higher deductible to add the accident and CI my commission is very little more if any. Each case is different.
Are they for everybody, probably not. Most of my clients without kids don't do the accident. It's all about doing what's right for the client and still being able to make a good living.
To each his own. That's what I love about this business. We all have different opinions and can do things our own way. That's why I went independent because I had greedy managers telling me which products to sell. Made me very leary.
Re: What do you sell?
Linear Mode
