How does a health savings account work and do you need one?
Health insurance is probably not on the top of anyone’s list of favorite subjects to discuss. But what you might not realize is that there are options within your insurance that may be able to help you save money—which, of course, is a favorite thing for everyone. So if you’re wondering what a health savings account is and if you could benefit from one, keep reading: we have some answers for you.
What’s a health savings account?
Put simply, a health savings account, or HSA, is an account that is essentially designated for medical expenses, funded by your own contributions and often contributions from your employers. Much like health insurance, you set a monthly percentage aside in your HSA fund to use as needed for doctor’s appointments, medical tests, lab work, and other related items.
Can everyone have one?
In order to contribute to an HSA, you need to be enrolled in a high-deductible health plan (HDHP) for your health insurance. An HDHP is essentially an insurance plan that usually lowers your monthly premium payments but will likely increase your deductible, meaning you pay for more healthcare services or items until your deductible has been met for the year.
Why would I increase my deductible?
An HDHP may seem counter-intuitive, but in conjunction with an HSA, it can be very beneficial. You can pay toward your deductible with your HSA funds, meaning you are essentially only using money you have designated for healthcare and not spending out of your other financial resources.
Who does an HSA benefit most?
Whether you need or would benefit from an HSA depends on a few factors, including:
- Your health
- Your budget
- Your age (i.e. how close to retirement you are)
- Your job
Not everyone wants or needs an HSA to cover their medical expenses.
Who should avoid an HSA?
Again, deciding to open a health savings account depends on a lot of your individual needs and circumstances. But for some people or families, an HDHP/HSA may not make as much sense. For instance, if you have a chronically ill family member that requires a lot of tests and specialized appointments, it may be more difficult to pay the higher deductible on top of the out of pocket expenses, even if you utilize your HSA. On the other hand, if you have a family member who requires regular testing that is always expensive, you may meet your deductible earlier than you think, meaning you will be able to enjoy the benefits of lower monthly premiums. You are the only one who can decide which scenario best applies to your situation.
How do funds get to my HSA?
The amount you decide to contribute to your HSA is up to you—consult your budget and see how much you think you can add each month without compromising other financial needs. You will work with your employer to set that amount and can speak with an HR rep to learn what the company average is to give you a starting point. Your company may also contribute to your HSA fund—many companies often match your contribution up to a certain percentage, meaning it may be worth it to do contribute a little more of your own paycheck if your employer is going to add more, too.
What if I don’t use it?
You may have a banner year with few visits to the doctor, which is what everyone hopes for. In this case, you may not use all of your HSA funds, but no need to worry—those funds will roll right over into the next year and remain available for your use. The HSA funds also stay with you even if you change jobs, meaning you can start saving now for a lifetime.
What are the pros and cons?
Pro: Having designated funds for healthcare may allow you to seek treatment that would be otherwise financially unavailable.
Con: Because funds are added monthly, it can be tempting to skip appointments or avoid testing because you want to wait for HSA funds to be available. Your healthcare provider can tell you what can wait for now and what needs to happen immediately.
Pro: The money in your HSA account is yours to spend. You are not obligated to see a specific medical practice or use certain medication brands—you have a choice.
Con: In emergency situations, you will need to receive treatment from the closest medical facility available, which may not be one you have budgeted for. Try to leave some extra funds in your HSA when possible.
Pro: The money you contribute to your HSA is tax-free, meaning you will get the full value of each contribution.
Con: Health is hard to predict. Just because you have an HSA doesn’t mean you shouldn’t have a plan for your health expenses outside of your HSA funds. Hope for the best but always plan for emergencies.
Using an HSA can be immensely helpful for many people, so talk to your employer this week about whether that’s an option for you and how you find out more information. Remember, your budget is always up to you—don’t trade necessary expenses for additional funds. Look at your finances, review your health history, and learn how an HSA may make a difference for you.
Georgia’s Own Healthcare Heroes
As part of our Georgia’s Own Hero series, we’re honoring Georgia healthcare professionals who have been working bravely and tirelessly throughout the pandemic. Below are five extraordinary women who play an integral part in Emory Healthcare’s role in fighting COVID-19.
Colleen Kraft
Colleen Kraft is an infectious diseases specialist at Emory and has spent her career studying and treating communicable diseases. She was on the frontlines caring for Ebola patients at Emory and is now a vital part of a team responsible for protecting hundreds of healthcare workers on the frontlines of the pandemic at Emory’s hospital network.
Deena Gilland
Deena Gilland is vice president and chief nursing officer for Emory Healthcare’s ambulatory patient services. Her knowledge of ambulatory clinical nursing deployment has played a significant role in her ability to lead and influence the mobilization of the COVID-19 vaccine for eligible groups in the hospital network.
Marybeth Sexton
Marybeth Sexton is an infectious diseases specialist and epidemiologist at Emory Clinic. Sexton is a key member of a team that leads COVID-19 preparedness efforts for the entire Emory Healthcare system.
Sharon Vanairsdale
Sharon Vanairsdale is the program director of the Serious Communicable Diseases Unit at Emory. Vanairsdale applied some of the critical lessons learned from the successful treatment of Ebola patients at Emory to help set rigorous standards for provider safety when caring for patients with suspected or confirmed COVID-19.
Christy Norman
Christy Norman is the vice president for Emory Healthcare Pharmacy Services. She led the complicated vaccine storage and distribution protocols for the COVID-19 vaccine for the state’s most comprehensive healthcare network. She also administered the first vaccine at Emory to a frontline worker in December.
To these brave women and every healthcare worker courageously fighting the pandemic—thank you. We appreciate everything you do to keep our communities safe and healthy, and we are grateful for your guidance and leadership during this time.
5 things to do at home while practicing social distancing
With more people working from home, as well as students completing online school, social distancing has become the new norm. More than ever, it’s critical to stay home as much as possible—however, being home all day can take a toll on your mind and body. Looking for something besides Netflix to keep you and your family busy? Here are five ways to pass the time while practicing social distancing:
Go on a virtual tour
With the temporary closing of many museums, zoos, and aquariums, some establishments are offering free virtual tours, so you can experience everything without leaving your home. The Georgia Aquarium has nine live webcams, operating 24/7, that offer you a close and personal view of various marine wildlife throughout the aquarium. For those wanting to take it international, the world-renowned Louvre offers a free, online tour of some of its galleries—view ancient Egyptian relics or classic works of art, all without leaving your couch.
Get started on spring cleaning
Now is the perfect time to get started on spring cleaning. Not only will you keep yourself occupied, but you can also complete tasks you ordinarily wouldn’t have time for. Determine what needs to be accomplished and set a schedule. Even if it’s one task per day, it’ll make a significant difference in the long run. You’ll have a cleaner, healthier home, and you’ll feel a sense of accomplishment.
Play a game
Now is the perfect time to break out your favorite game. Whether it’s Scrabble or a classic game of charades, this is a great way to keep the whole family entertained and engaged. If you don’t have any games on deck, don’t worry—there are hundreds of fun, free or cheap games on your smartphone’s app store that everyone can enjoy, like Heads Up!.
Exercise at home
You don’t need to hit the gym to stay fit—keep up with your fitness routine from your living room. There are dozens of websites, YouTube channels, and apps that guide you through workouts, with or without equipment—most are free, too. Down Dog is offering its yoga, HIIT, barre, and seven-minute workouts for free until April 1st. Popsugar Fitness also has over 1,000 free workouts at all levels to choose from. Or, if none of those sound appealing, you can simply go on an outdoor walk. Not only is it crucial to be sure you’re getting enough exercise—you also need to catch up on your vitamin D.
Learn a foreign language
If you’ve always wanted to learn a foreign language but never had the time, now’s your chance. There are numerous free websites, like Duolingo, that offer courses on languages like Spanish, French, German, or even High Valyrian if you’re a Game of Thrones fan. Duolingo offers personalized lessons and games that make learning easy and fun.
Right now, practicing social distancing is critical, but it can have a significant impact on your mind and body. Use these activities to keep you and your family occupied, all while ensuring you stay healthy and safe.
What the Coronavirus could mean for your money
Among the many concerns that COVID-19, or coronavirus, has brought to Americans and people worldwide is that of finances.
With school systems shutting down and some states even enacting a state-wide policy that allows only certain businesses to operate during certain hours, those who are still able to go to work may be wondering what they should expect as far as their paychecks – while those who have already been called out of work are wondering how to stretch their paychecks as far as they can. Read on for information on what the biggest concerns are, and how you can combat them.
Overall financial concerns
There is good and bad news here. You’ve seen the stock market took a hit. Bad news. But as a result, the Federal Reserve is taking extra steps to keep the economy afloat as everyone tries to predict how long this crisis will change our daily lives, such as lowering interest rates for student loans and home loans. Good news.
Financial experts are all saying the same thing: Don’t panic-sell anything! Now is not the time to throw years of investments and planning away because things seem so dire right now. Eventually, this crisis will pass – and you will need your investments when it does.
Adapt to change
When changes like this occur, it’s smart to evaluate and take a fresh look at your budget. For instance, you may be working from home right now – but that means you are using way less gas than usual. Your grocery fund will go up, but your school activities will be at a standstill. Reallocate your funds as needed to get you through the next few weeks.
Stretch it out
This isn’t a comment on your time at the gym (please don’t go to the gym). You can find creative ways to stretch your dollars even beyond their usual point. Turn the week’s leftovers into a meal all its own. Buy off-brands instead of your usual store brand for groceries. If you can work from home outside of your typical job description (i.e., help the front desk send emails, do some digital filing, etc.), take the hours that you can so you can keep some cash flow coming.
Cut it out
How many digital streaming services do you have? Probably more than one – so why not stop subscribing to some of them for now? We know that having your kids home with no Netflix may sound like the worst idea ever, but split the difference and keep the one service your family uses most. Also consider reducing the level of service you purchase to save a few bucks.
Refinance student loans
Remember what we said about interest loans being reduced? Since you have a lot of extra time at home right now, why not look into refinancing your student loans to see if you qualify for a lower interest rate? That may not change your immediate situations, but it will certainly be useful down the line when we all return to our usual routines.
Save for emergencies
Again, we realize that you may be scraping by while things are uncertain. But as soon as you’re able, go ahead and start an emergency fund. A good rule of thumb is to have three months of your salary stashed away. But you can start small. That change from the gas station? Drop it in a jar. The next time you find a $10 bill in your wallet, put it aside. A little here and there will mean big changes later on.
No one can predict the future – but you don’t have to let it control your finances. Spend wisely, save daily, and remember that this is temporary.
Five financial mistakes you might be making with your healthcare
According to a 2018 American Household Credit Card Debt Study, medical costs have increased by 33% since 2008. On the bright side, the median income is on the rise, too. However, it’s growing at a significantly slower pace than healthcare costs. How are patients managing? Nerd Wallet reports that up to 27 million adults in the United States are charging medical expenses on credit cards–that’s how.
The rising healthcare numbers are frightening, especially since most medical costs aren’t optional. Maybe patients are paying those charges off at the end of the month, although with the increase in revolving debt in the U.S, it’s not likely. In fact, healthcare costs are the number one cause of personal bankruptcy.
Healthcare is a critical concern for many people, and so is managing their finances and making smart financial decisions. So, here are five common healthcare-related financial mistakes that you may be making right now and how you can turn them around.
1. Not comparing healthcare plans
The best way to find the most affordable health care coverage is to shop and compare prices, features, coverage, deductibles, prescription benefits, and provider networks for different insurance plans. We know that sounds tedious and complicated, but there are websites that allow you to compare plans on your own, or you can simply contact a local insurance agent to help.
If you qualify for your employer’s healthcare plan, be sure to review and compare your options there, too. Many employers still pay a portion of the monthly premium, and since your premiums are paid with pre-tax dollars, it lowers your taxable income, too. Those plans are generally hard to beat in terms of pricing and features, especially if you work for a mid- or large-size company, but do your due diligence.
It’s easy to compare plans by their monthly premium, but there’s more to them than just their price tag. A less expensive premium will lower your monthly out-of-pocket cost, but, in the end, you might wind up paying more on claims.
Consider your healthcare needs, the average number of times per year that you visit your doctor, your copay amount, the cost of your prescriptions, and whether your preferred doctors are in-network. Keep in mind that the highest and most expensive plan is not necessarily the best option for everyone, even if your budget can afford it.
2. Not knowing how your plan works
One your insurance plan is in place, it’s important to know how it works. It may be a bit confusing at first, but if you don’t take the time to understand the rules and features, you run the risk of spending far more money than you should.
For example, your physician may be in-network, but their in-house lab may not. Or, the hospital may be in-network, but not the doctor you see. Check with your insurance company before any scheduled service or procedure to make sure you’re utilizing as many in-network providers as possible. It’s also important to know when you need pre-authorization for an upcoming test or a procedure. Without it, your insurance company may not pay any portion of the cost, which can be pretty hefty.
Getting to know your plan isn’t only about discovering the limitations. If you’re lucky, you might find some hidden gems along the way, like reimbursement for your gym membership or a weight loss program, or a free smoking cessation program. If you have questions about your plan, don’t hesitate to call your insurance company’s customer service department. They’ll help you make better, more informed decisions and ultimately avoid unwelcome surprises.
3. Forgetting to compare service costs
If you’re in the market for a new television, want to hire a lawn service, or need to have your home painted, you shop around for the best price, right? Why not do the same when your doctor orders labwork or an MRI? Sometimes these can be big-ticket items, and there’s no standard price across the board.
Whether you’re choosing a doctor, planning to have surgery, or searching for a pharmacy, you should compare costs. Prices for these services vary widely. With a little research, you can really save some cash. To get started, check out these highly regarded online cost comparison tools for the latest pricing on common medical procedures, prescription drugs, and services.
Consider too, the day of the week and the facility you choose when you need medical attention. Without question, in the case of an emergency, you should go directly to the nearest Emergency Room. If, however, you visit the ER every time you come down with a cold or the flu, there’s an opportunity to lower your costs significantly.
If it’s after business hours or over a weekend, consider whether your condition can be handled by an Urgent Care Clinic. During the week, a visit to your primary care physician is a financially smarter choice. Minor illnesses can even be handled through a virtual visit with an online physician if your insurance plan allows. All of these solutions are more cost and time effective than an Emergency Room visit, so if it’s not a true emergency, you might want to explore another option.
4. Not inquiring about generic brands
According to the FDA, a generic medication works in the same way and provides the same clinical benefit as its brand-name version. It’s the same in dosage, safety, effectiveness, strength, stability, and quality, the way in which it’s taken and used.
Generic brands have the same active ingredients, works in the same way, and come with the same risks and benefits as its brand-name counterpart. So, if a generic medication delivers the same result and is less expensive, why not use it?
The main difference between generic and a name-brand drugs comes down to cost. Unlike brand companies, generic manufacturers compete directly on price, which results in a lower cost for patients. How much lower? Generics have saved Americans $1.67 trillion over the last decade.
Any time your doctor orders a prescription, be sure to ask if there’s a generic alternative. You’ll feel better both medically and financially!
5. Neglecting to negotiate a payment plan
Sometimes an unexpected illness, an accident, or a hospital stay brings costly medical bills that your insurance plan won’t cover. Or, maybe you don’t have a medical insurance policy to help offset some of the cost.
While it’s easy to see how a situation like this could wreak havoc on your finances, there are ways to make the cost somewhat more palatable. Contact the billing department and ask about any discounts you may qualify for, especially if you’re able to pay a lump sum or a portion of it up front.
Some hospitals, nonprofits in particular, have financial assistance programs designed to help people pay for medical care that they couldn’t normally afford, and there are others that offer a 0% interest repayment loan. Neither you nor the provider wants the bill to go to collection, so you both have a vested interest in working together to find a comfortable solution.