By In General Benefits Knowledge, Health Insurance

When it Comes to FIRE-ology, U.S. Health Insurance Is Different from Other Kinds of Insurance

As I’ve reading through blog entries and comments in the FIRE community, two things have come to mind:

  1. Y’all are some smart mofos! Seriously, reading what everyone is saying about how they consider their benefits in relation to their income, savings and wealth is endlessly entertaining and rewarding. People are taking the time to really think about what they’re doing, learning by trial and error, and experimenting with strategies that work for them based on where they are in their lives and, often, where they are in the world. Keep it up, people!
  2. It’s human nature to think of your health insurance in the same way that you think of other kinds of insurance, like your auto or house insurance (“P&C”), or life, disability and other accident indemnity insurances. It works to an extent, but be careful not to think of them as interchangeable. That’s what today’s post is about.
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By In Around the Web, Flexible Spending Accounts (FSAs), Health Financial Accounts, Health Savings Accounts (HSAs)

Yep, Amazon Has an HSA Store

Last week, I wrote about the best places to buy things with your HSA/FSA funds if you want/need to use that money rather than just maxing out your account and investing the money — or, alternately, you don’t have access to an HSA but do have an FSA and want to ensure you use all of the funds as wisely as you can. Welp, I found out today that Amazon now has an HSA/FSA store, which means they have a place where you can enter your debit card number and then shop exclusively for items that are account-eligible and still apply your Prime account for free delivery.

Giddyup!

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By In Around the Web, Health Savings Accounts (HSAs), Taxes

Advice on Handling HSAs on your Tax Return

Here’s a thorough article from the New York Times “Your Money Adviser” column on how to handle health financial accounts like HSAs and FSAs on your income tax return. It includes details about annual limits and what you need to claim expenses. My one criticism is the “But Beware the Paperwork” in the headline. If you are paying for medical expenses on your HSA card, your HSA sponsor bank will mail you a ready-to-submit form, just like a W2 or 1099. If you are tracking your expenses yourself, it is more work but not too cumbersome if you create a manila folder and just make sure to save your receipts. Either way, definitely don’t leave money on the table for medical expenses come tax time!

From the New York Times: “Health Saving Accounts Can Reduce Tax Bills. But Beware the Paperwork.”

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By In Do the Math, Health Financial Accounts, Health Savings Accounts (HSAs), Retirement Income, Retirement Investment Accounts, Savings

Doing the Math on Why You Should Max Out Your HSA Contribution

Here are The Benefits of FI, we talk about HSAs as a savings vehicle for retirement in the same vein as a 401(k) or IRA. That’s because it has the same basic features of enabling pre-tax savings to be invested and thereby grow at a significantly higher rate than post-tax dollars in a standard checking or savings account.

What some of you, especially those who have just started you FI journey and have neither started a family of your own nor seen your own parents get to standard retirement age, may be thinking is that since you’re saving the money for retirement, it’s retirement income that you’ll get to spend on fun stuff. Hopefully that will be true (although you’ll get taxed on it), but odds are that you’ll use it for medical expenses, which are never as fun but almost always a factor.

Research by Fidelity Investments, reported by Money, shows that the average couple currently reaching retirement age will incur $280,000 in medical-related expenses in retirement. As homer Simpson would say:

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By In Health Insurance Utilization, Prescription Drugs

Another Example of Why You Should Always Ask the Price

My wife went to the pharmacy the other day to refill a prescription. We changed insurance on January 1, so when they told her the first time she got the it filled three weeks ago that our plan didn’t cover the prescription we needed for one of our kids, it didn’t seem out of the ordinary. In fact, the pharmacy was nice enough to give us a discount through GoodRx — something I talked about in this post.

Well, it turns out that the discount was a whole lot more than we should have paid, anyway.

When the pharmacist told my wife our Rx would be $152, she texted me just to commiserate about the high cost and ask if it was because of our new insurance. I said yes but that they gave us a discount to get it down to $90 and that she should be sure to ask if they can give it to us again. That ask set off a series of events that blew our minds.

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By In Do the Math, Flexible Spending Accounts (FSAs)

As the Grace Period Deadline Approaches, Remember: FSA Funds are ‘Use-It-or-Lose-It’

As of this posting, there are seven days left in the most common “grace period” for using your 2018 FSA funds — that’s March 15, 2019. For those who don’t have a health savings account (HSA) but do have a flexible spending account (FSA) tied to their health insurance, you hopefully know that if you don’t spend your tax-deferred contribution by the end of the year or, if you’re lucky, the end of the “grace period” for the year, those funds are gone. They’re not gone gone, like totally disappeared. They’ve just been reclaimed by your employer and are no longer available to you.

So…in the short run, use those funds! And in the long run, make sure you’re calculating properly what you may or may not use in a given year. More details after the break.

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By In Around the Web, Do the Math

An Example of Why It’s so Important to Ask What Your Medical Services Cost

Morgan Gleason is a 20-year-old patient advocate living with a rare condition that requires monthly treatments. It’s manageable but also costs a lot, and she relies on health insurance to reduce her and her parents’ costs significantly.

She recently decided to compare both what hospitals were charging her and her insurance companies, and what her insurance companies were paying and telling her to pay. Her post on it, “No Wonder Healthcare Is so Expensive!” is frustrating, revealing and educational — you should go read it right now! She has a clear grasp on both the economics and the insanity of it all.

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By In Around the Web, Money-Saving Tips, Student Loan Debt

Want to Pay Down Student Loan Debt Faster? Consider Moving to the Cleveland Suburbs

Back in the early ’90s, there was a show my mom and I used to love called Northern Exposure. It was about a doctor who, in return for getting his tuition paid, moved to a small town in Alaska to be the town’s general practitioner for a number of years. It’s a practice that still occurs and in fact may be expanded in the coming years as higher-education costs continue to go up up up.

A story from CNBC,”Here are ways to pay off student loans, using other people’s money,” reveals that a similar practice is available in several states, most notably in Maine, where your student loan debt is deductible on your state income taxes, and in Newburgh, Ohio, where you can get up to $50,000 toward paying off your student loan debt by buying a house you plan to live in inside the city limits. I did a Zillow search and it looks like apartments and houses are going for anywhere from $57,800-$250,000+ in this Cleveland suburb. Pretty good deal if you’re cool with Cleveland.

Other helpful tips are volunteer opportunities that will pay you a monthly stipend toward debt paydown and, of course, through your job. Tess wrote about what to look for in those job-based options.

Got your own advice? We’d love to hear it!

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By In Around the Web, Student Loan Debt

If You’re Dealing with Student Loan Debt, You’re Not Alone

There’s not a lot to say about this segment from “Patriot Act” that Hasan Minhaj and his writers don’t say themselves all too well. Student loan debt is a huge issue that impacts our ability to save for the future, whether we’re just getting out of college and staring down our debt or we’re saving for our children’s education. Take 25 minutes when you have a chance and watch.

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By In Around the Web, Money-Saving Tips, Savings and Budgets, Student Loan Debt

How to Graduate from College Debt-Free, or, It’s Never Too Early to Live the FI Life

A lot of you were initially attracted to the FI movement by a need to change your situation, and most frequently that “situation” was student loan debt. As we all know, and as Hasan Minaj so brilliantly covered on his show (linked here), student loan debt is a national crisis and it’s really, really rare for anyone to come out of college and not have at least a little bit of debt.

That’s why when I saw a post on Twitter about a woman who graduated debt-free, and then I saw her tremendously useful recap of how she did it, I just had to share it. The main takeaway is that you CAN avoid debt before you even get it. There are major tradeoffs but I guarantee they’re worth it.

Read on for the tweet and the tips.

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