Health Reimbursement Accounts: Anyone had personal experience with these? Pros/cons?

Although I took early retirement, I was able to retain my health insurance coverage with my school district. This year they're offering us the option of going with an HRA? Has anyone out there gone this route?

If so, what do you see as the pros/cons of this sort of coverage. I've read the info the school district supplied and done some basic web research, so thought I'd try seeing if I could get any real, honest opinions on whether it's a good coverage. I have no opinion one way or the other at this point, other than that it's cheaper, tho' with the higher deductable, so would like to hear honest opinions, both pro and con.

Thanks! Asked by Tundra 55 months ago Similar questions: Health Reimbursement Accounts personal experience Pros cons Business > Insurance.

Similar questions: Health Reimbursement Accounts personal experience Pros cons.

If it is, I found it to be a bum deal. I’m not talking about the traditional potential tax saving Medical Expenses account, where you can estimate medical bills/expenses through and then not pay tax on the money. I think these were called Medical Savings accounts and you could also claim childcare expenses.

Even though this traditional tax savings plan (if you correctly estimate your medical bills) is "use it or lose it" I’ve used it in the past and always found it to be straightforward. But if you are talking about the new fangled Health Savings Account, different story. With a HSA you setup an account with a private bank and allocate funds (untaxed) to go to the account from your paycheck.

This account is only to be spent for medical expenses and you may be audited, so save your receipts. I would warn against the banks expenses (may vary) which come with these type of accounts. Unfortunately, you aren't able to chose the private bank or account type, with the new HSA’s captive audience I’m not sure that any account rates are reasonable.

But it may be worth a try. Do check first to learn what the bank fees are before you set up the account. I had an HSAccount with Exante bank (per my employers coverage package) I had to go with this particular bank for the HSA.

Exante bank warned there were 'minimal' fees but WoW! Were there an awful lot of them. They charged me $2.50 monthly service charge, plus withdrawl fees, a below $500-in-account fee, and a close-your-account fee.

Plus the default account option of No monthly statements. After several months I called to find out where my statements were. I was told to call again after the 20th of the month and put in my request and then I would get my following month’s statement in 6-8 weeks.

Um, so I couldn’t even see how fast they were adding on fees. The initial touted advantages of such an account a.It wasn’t taxed (because it’s only for medical expenses), b. You can use it as long as you keep the account open, and you don’t ’lose it’ (but don’t quote me on this, check with your account administrator on your policy).

And c. The money can earn interest (The health coverage may/may not be good. Compare to Blue Cross/Blue Shield (which is pretty good) or others.

In my experience, the HSA didn’t pertain to the quality of the medical insurance. HSA is a plan to ’save’ medical expenses money. It was an add on and any number of insurance plans of varying quality could be bundled with it.

Personally, I’ll only go with the traditional Medical Savings Account next time and just plan out my regular co-pays and reoccuring medical expenses to set aside (with the "use it or lose it" policy). I would avoid getting another HSA as it seemed to be an adventures in constantly ’losing’ the money I was supposedly saving for medical expenses. Other banks may be better, but definitely check all the fees first.

Best of luck to you! They sure don’t make it easy. Sources: my past MSA's and my shortlived HSA.

1 Thanks for the input, Star. They seem to be two different things, but with quite a few similarities. I did find out for sure that the HRA is NOT a "use it or lose it" situation, which is good, but I'm thinking it mentioned something about a credit card being involved, maybe optional, so need to check that out.

I'd never thought about any fees coming along with that. Jeez, you are so right. They don't make this easy.

Thanks for the input, Star. They seem to be two different things, but with quite a few similarities. I did find out for sure that the HRA is NOT a "use it or lose it" situation, which is good, but I'm thinking it mentioned something about a credit card being involved, maybe optional, so need to check that out.

I'd never thought about any fees coming along with that. Jeez, you are so right. They don't make this easy.

2 Just bumping this up to see if anyone who might have missed it earlier has any insight. I need to sit down and make some decisions this week, so any and all input is appreciated.

Just bumping this up to see if anyone who might have missed it earlier has any insight. I need to sit down and make some decisions this week, so any and all input is appreciated.

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