Health

HSA: Guess Not Yet Time

Would the question rather be should you? Or would you? Now before we indulge in some plain talking, let us first know what HSA is all about.

What is HSA?

HSA or Health Savings Account, tax benefited medical savings account, which is available to taxpayers who are enrolled in an HDHP or High-deductible Health Plan. The funds invested in such an account will not attract Federal taxes at the time of deposit.

And now come back to the question, why shouldn’t we have an HSA?

Now let me be clear at the onset, that HSA does offer some great benefits and is not all bad. In fact, it should be a plan for the future for every young investor and savings aficionado. However, it really is not for everybody. Let us see the reasons:

  1. HSA needs time to have your funds build up. HSA is basically the combination of employees as well as the employer contributing towards that account, every payday. Now, given that kind of a rate and depending on the expense getting pulled out, it does take a fair amount of time for money to build up.
  2. Suddenly the drug prices begin to pinch. A $20 prescription drug can suddenly turn into a $120 behemoth. Now we know there is a reason for it but it usually is very confusing to understand the dynamics behind it all.
  3. The HDHP is named for a reason. High Deductible in an HSA is high. Period. Compared to most traditional health plans, the deductible here is absolutely in the north. The IRS has also asked for HSA plans to have a minimum family deductible of $2400. On the higher, this figure could touch $6500 for a maximum out of pocket payment of $12100. One look at the figure and you can understand that this entails a lot of cash in one go.
  4. One of the greatest reasons why HSA is not for everyone is primarily because of the confusion it creates. Now, as a rule, you can use your HSA card to pay for any 213(d) expense. There is a list of expenses which fall under the 213(d) expenses as per the schedule present in the IRS Code Section 213(d) Eligible Medical Expenses. The question is how many of us would actually know it. None carry a list and would probably ever do.
  5. As I had mentioned earlier, HSA has its fair share of advantages, but because of the lack of education, it becomes very difficult for most organizations to drive it among its employees. HAS does require a bit of self-research but when fully understood it does offer great benefits. Till such time, it would be an advice to look out for more traditional and simpler medical plans.

10 Awesome Tips to Save Money on Groceries

We often don’t realize that we are spending a larger chunk of our income on groceries and end up stocking our refrigerators with unnecessary items. Before your food and grocery spending burn irreparable holes in your pocket, it is time to save some on your groceries.

save money on groceries

 

Here is a list of 10 awesome tips to save money on groceries:

  1. Prepare a menu – Planning what you want to eat before running to your nearest store might sound a drab activity but is extremely important if you want to save money on your groceries. Why do you want to end up buying items that you are not going to eat? Prepare a detailed menu so that you know the items you will have to buy.
  2. List standard items – Besides preparing a menu, there are some standard items that you will always require to rustle up a quick meal, breakfast, lunch and dinner. You will never forget the items that are a part of almost all meals or common to several dishes.
  3. Look for sales – There is no better way to save money than buying grocery items during sales. Often the stores put up items for sale and you can get your daily food items at discounted rates.
  4. Buy in-season fruits and vegetables – For staying healthy, we all need to eat fresh vegetables and fruits. However, these are expensive items, especially if you are buying fruits or vegetables that are usually not the season’s produce. Buy only in-season produce as that’s the best way to get your regular dose of fruits and vegetables while not spending a lot of money.
  5. Collect Coupons – There are several online resources to get the best deals on grocery items; you can always collect the coupons to save a lot of money on your grocery purchases. Alternatively, you can also collect the coupons available with magazines and newspapers.
  6. Learn the store policies – Not all stores accept competitor coupons, so you will have to learn about the store policy where you usually purchase your grocery items.
  7. Cut down on the number of monthly store visits – This actually helps you to collect your coupons and visit the store during sales, so you will be able to make a killing. However, you can’t expect such outings more than once or twice in a month, so you will have to cut down on the number of monthly store visits.
  8. Choose your store wisely – Choose the store that offers maximum sales and discounts; a surefire way to save a lot of money on your groceries.
  9. Buy only necessary items – You should always buy the items that you need and nothing more than that. Even though you will be tempted but try to restrict yourselves to the necessary items only.
  10. Don’t take your kids to the store – They are not going to help you in shopping and instead compel you to buy a few items more; leave the kids at home while visiting a store and you will be able to save a few more dollars.

Daily Financial Advice Mallard 2-23-2014

Daily Financial Advice Mallard 2-23-2014

If you’re ever homeless spend your remaining money on a 24-hour gym membership. You’ll have a place to go at night, access to showers, and a locker to store all your belongings.

Of course no one ever wants to be homeless or be in that situation but having a gym to go to is a great way to stay in shape and stay clean cut while you look for a new job and get back on your feet. Gyms are clean places with showers, free water, sometimes snacks, and if you can find it even often open twenty four hours a day.

How do I Pick My Insurance if I Have a Choice at Work

Choosing a health plan at work can be confusing and often overwhelming. The specifics will vary with each employer, but there are ways employees can evaluate their options to find their best mix of cost and coverage.

Picking Insurance

Cost
Cost for the employee falls into two categories:
1. Up-front premiums.
2. Charges at the time of service.

The premium is the amount taken out of each paycheck for the employee’s share of the insurance company’s charge for the plan. Most employer plans are designed so that premiums are deducted pre-tax, meaning the employee saves on federal income and Social Security taxes and possibly also state income taxes.

Charges at the time of treatment are the out-of-pocket amounts patients must pay to receive medical services. Co-pays, deductibles, and co-insurance can vary a lot depending on the chosen plan and services used. In evaluating this factor, the employee must remember that, under healthcare reform, any service designated by the federal government as preventative should be provided at no charge to the patient.

The cost factor in choosing a plan often comes down to balancing higher premium cost against lower charges for treatment and vice versa. But this relationship between premiums and out-of-pocket does not always hold because of the variable of coverage.

Coverage
Depending on plan design, coverage will vary among plans in multiple aspects:
1. Is a service covered at all?
2. Is there a cap on the service (number of visits, frequency of tests, etc.)?
3. How much flexibility does the patient have in choosing the provider or opting for a procedure?
4. How often are referrals and preauthorizations required?

Don’t assume a service is covered by all plans just because it is covered by one. If an individual plans to use a particular service, she should review all the plans she is considering to make sure coverage is available for that service.

Perhaps the service is covered but the plan puts a limit on the number of visits. The employee should compare any such limits with his anticipated use of the service. If the plan will not cover his full utilization, the employee must determine if, for him, the extra out-of-pocket expense is worth the service or if another plan is the better approach. Depending on the employer, the employee might also have options such as a Flexible Spending Account (FSA), a mechanism for the employee to set aside pre-tax dollars to use for any medical expenses not covered by insurance.

As a general rule, the more flexibility the patient has to choose doctors and services without getting a referral or preauthorization the higher the premium cost. Plans can range from the HMO, which requires all medical services be arranged through a primary care physician, to a traditional indemnity plan, which places almost no restrictions on where the employee can seek care. The employee must look at her own situation to decide how much choice and flexibility she is willing to pay for relative to the other factors.

Should I Use a High Deductible Health Care Plan?

Expenses for medical services can be very costly these days. For a person to go without health insurance is a dangerous financial risk. If a major illness or accident occurs a family can find themselves facing enormous medical bills. Medical expenses quickly add up and the inability to pay them can wipe out someone’s finances entirely. Many hospitals refuse to see patients who are uninsured unless it is a dire emergency.

At this point the patient is usually just stabilized for transport to another hospital that accepts the uninsured. Often people choose to take the risk of going without insurance because they think that they will not be able to afford the insurance premiums. Or they simply choose to take the gamble of going without health insurance because they are normally healthy and seldom need to seek medical care. Most health insurance policies offer many different packages to fit a variety of budgets. Health insurance deductibles affect the amount required for the premium, choosing a higher deductible will result in a lower premium.

This option is better than having no insurance at all. With a higher deductible a person has more out of pocket expenditure initially; however once that deductible is met the insurance will then cover whatever portion of the expenses they are required to pay. The insurance policy will specify the exact amounts of the deductible, what procedures are covered by the insurance, and what portion the insurance will pay. Most people are surprised to find out how quickly they can meet their deductible within a few physician office visits. If a major illness strikes and hospitalization is required that deductible could be met in as little as one day. A bill for the deductible amount is going to always be a better option than having to pay the entire bill for a hospital stay out of pocket.

One benefit to having a deductible is that a person knows exactly what amount they will be responsible for paying. There will not be any big surprises because they know what to expect. For people living paycheck to paycheck surprise bills can really throw off their budget. By knowing the exact amount required to meet the insurance deductible they can plan accordingly. High deductible plans are a great option for those looking to save money on insurance premiums and most people are in a safe position to take advantage of these savings.

People with chronic illnesses such as diabetes might find it more beneficial to go with a lower deductible, however for those who are generally healthy there is no need to pay a high premium for insurance that they may not even use.

Another benefit to having a high deductible is being a healthier person. Knowing that they have a high deductible often encourages people to take better care of themselves to avoid getting sick in the first place. This is a win-win situation, they are saving money on their health insurance premiums while getting healthier in the process.