Making your health plan pay you

Tired of paying more and more each year for your health insurance? Especially after years when even a 1 percent pay raise was 100 percent more than you got the year before? Do you know how you can actually make money, and keep it, thanks to your health plan?

It helps to know what CD (consumer driven) and HD (high deductible) mean in a health plan, and what benefits (and drawbacks) they present.

Federal health insurance expert Walton Francis says that some of the government’s health plans —those with HD (high deductible) or CD (consumer driven) in their name are the equivalent of “an IRA on steroids.” Francis says that active-duty feds, especially those who are in good health and who seldom use their insurance, can make money — thousands of dollars over time — that is theirs to invest and keep. The secret is the plan’s H.S.A. (health savings account) feature, which they pre-fund. In pre-tax dollars, which makes it even sweeter.

Francis says the H.S.A. “goes in tax-free, earns investment income tax-free, and comes out tax-free.” And you can augment the amount that the plan puts in each year, thereby getting an exclusion from taxable income of thousands of dollars. Unlike the use-it-or-lose-it feature of FSAs (flexible spending accounts), the health savings accounts are yours, unless you spend them. “H.S.A. accounts are sometimes described as ‘trifecta’ benefits,” he says, “because the contribution is tax-free, the account grows tax-free, and the disbursements from the account are tax-free when spent for health care.”

Unfortunately, H.S.As are not available to retirees to start or add money to, once they enroll in Medicare Part A or Part B. But if they have an H.S.A. before they sign up for Medicare, they can keep it and it will continue to grow.

So who is eligible for an H.S.A? Which plans offer them? What are the drawbacks, including the obviously higher out-of-pocket costs you might incur in an HD (high deductible) health plan?

Listen today at 10 a.m. to our Your Turn radio show. You can listen  online, or in the Washington metro area on 50,000-watt 1500 AM. The show will be archived on our Your Turn page so you can listen later. And refer it to a friend or coworker. If you have questions there are two options: Call during the show at 202-465-3080, or, you can email questions to me — before the show starts so we can answer them on air at mcausey@federalnewsradio.com.

The health savings account option might not be for you. On the other hand, it could let you buildup a big pot of tax-free money. You’ll never know until you check.

Don’t miss an episode of Your Turn with Mike Causey. Subscribe on iTunes and have the episode downloaded automatically to your phone or desktop. You can also download past episodes.

Nearly Useless Factoid

By Michael O’Connell

With a population of just 1,141 and a size of only 0.097 square miles, Shrewsbury Township in Monmouth County is New Jersey’s tiniest town.

Source: NJ.com

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