I've been doing some research on these...very basic late night research.
It looks like it's possible to get a high-deductible health plan (HDHP) on your own. You may then open an HSA, somehow and somewhere. You can invest a few thousand in it per year. This amount is pre-tax, tax-free, and tax deductible. It has tax-free distributions for medical expenses, and can at some age be used for any expenses. I'm not sure if it can be converted into an IRA or something similar.
The question I'm trying to answer is whether finding an HDHP and maxing an HSA is better than using the non-deductible (and free) employer sponsored plan. I'm leaning on no, just because it would require lots more research and I'm tired
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On another note, post-college life has largely consisted of cost-benefit analyses on everything from insurance to transportation to taxes. Fun.
HSAs?
Re: HSAs?
Individual plans are going to be high cost without a subsidy. At your income level, you won't get a subsidy, and you wouldn't be eligible for anything on the exchanges anyway because your employer offers you a plan.
There are off exchange plans that meet the Obama care criteria that wouldn't make you subject to the tax penalty that you could look at I guess, but even then, your premiums would be
paid with after tax dollars. Pre tax dollars are used to pay for premiums when run thru a pay check.
I'd stick with your employer provided free plan in your situation. I do the very thing I describe not to do above, but only so that I do not have to work full time. It isn't cheap for me at all, but the HSA part isn't the driver.
There are off exchange plans that meet the Obama care criteria that wouldn't make you subject to the tax penalty that you could look at I guess, but even then, your premiums would be
paid with after tax dollars. Pre tax dollars are used to pay for premiums when run thru a pay check.
I'd stick with your employer provided free plan in your situation. I do the very thing I describe not to do above, but only so that I do not have to work full time. It isn't cheap for me at all, but the HSA part isn't the driver.
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Re: HSAs?
Since your income will probably not support buying insurance and maxing out other tax-advantaged savings options and funding an HSA, I'm going to guess you are better off with the free medical insurance and stashing the avoided premium expense and forgone HSA contributions in something like a ROTH IRA. At what I'm guessing your present tax rate will be there's not a huge difference between the Roth and an HSA except the Roth doesn't have the eligible expense restrictions. Caveat is that I have not run the numbers.
Re: HSAs?
You'd have to do the math on both plans and compare, it's all available. There isn't any way we could tell for sure. Paying for your own health insurance, even HDHP, would be very expensive at your income level, so like the others I would lean toward the employer paid option.
That said, if you have an option at work I would go with an HSA eligible plan. It's a great tax advantage, and once you turn 65 you can withdraw everything penalty free, even non-health expenses. Basically it becomes an IRA. I currently have one and max it out every year at the family level, but that is going to change with my new employer.
That said, if you have an option at work I would go with an HSA eligible plan. It's a great tax advantage, and once you turn 65 you can withdraw everything penalty free, even non-health expenses. Basically it becomes an IRA. I currently have one and max it out every year at the family level, but that is going to change with my new employer.
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Re: HSAs?
I'll do some basic math.
You contribute 3350 to an HSA. You are taxed at 33% after federal and state taxes. You reduce your tax burden ~$1000 annually. Your cheapest plan is going to probably be around $2000/yr so this is likely to cost you more than it's worth.
You contribute 3350 to an HSA. You are taxed at 33% after federal and state taxes. You reduce your tax burden ~$1000 annually. Your cheapest plan is going to probably be around $2000/yr so this is likely to cost you more than it's worth.