The HSA Guy – Scott Borden

HSA GUY – N. Scott Borden

Scott obtained his insurance license in 1989 at age 22. For the first year, he focused on life insurance and investments as a Registered Representative with Prudential. The following 5 years, he worked as a district manager for Design Benefit Plans, a company focused on individual health insurance plans. In 1995, Scott became an independent agent.

He was first introduced to Medical Savings Accounts (MSAs) in 1998 and was immediately convinced it was the future of health care. In 2000, Scott joined OFM Benefits Consulting, LLC< (formerly Olympic Financial Marketing) to create a health insurance division focusing on the tax advantages offered by MSAs within an established nationwide independent life insurance agency.

In 2013 Scott joined Paychex to help mid to large businesses sort through the ever-changing regulations associated with Health Care Reform.

Scott can be reached at 913-980-4694

21 Comments

  1. 🙂

  2. Hi,

    This is saravana kumar. I am having a Health Insurance plan – PPO with my current employer. Can I open a HSA with a bank?

    Thanks,
    Saravana kumar

  3. Saravana,

    If your employer is offering you an HSA qualified Health Insurance plan, then you can. There are certain criteria necessary for a plan to be qualified. I copied this directly from the HSA Brochure (US Department of the Treasury) form that can be found on my website http://www.ofmtorch.com under HSA resources:

    High Deductible Health Plans (HDHPs)

    You must have coverage under an HSA-qualified “high
    deductible health plan” (HDHP) to open and contribute
    to an HSA. Generally, this is health insurance that does
    not cover first dollar medical expenses. Federal law
    requires that the health insurance deductible be at least:

    $1,100* — Self-only coverage
    $2,200* — Family coverage

    In addition, annual out-of-pocket expenses under the
    plan (including deductibles, co-pays, and co-insurance)
    cannot exceed:

    $5,600* — Self-only coverage
    $11,200* — Family coverage

    In general, the deductible must apply to all medical
    expenses (including prescriptions) covered by the plan.
    However, plans can pay for “preventive care” services
    on a first-dollar basis (with or without a co-pay).
    “Preventive care” can include routine pre-natal and
    well-child care, child and adult immunizations, annual
    physicals, mammograms, pap smears, etc.

    As health insurance premiums continue to skyrocket, there are many group coverages now moving to higher deductibles. Some people are being told that since their deductible falls within these guidelines that their plan is qualified. That isn’t necessarily the case. For example, Blue Cross Blue Shield of Kansas City has 3 individual policies available with a $2500 deductible, but only one of them is qualified for a Health Savings Account.

    If your deductible does fall into the high-deductible category you should still verify with your employer that it is an HSA qualified HDHP.

    If it is not a qualified plan, have them call me!

    Your HSA guy,

    Scott Borden

  4. Hi Scott–
    I’ve learned a lot from your blog, thanks.
    One thing I can’t figure out, sorry if you’ve covered it…Say I have a HSA for a number of years, bank quite a bit of dough…and then that accident we all worry about hits…would a catastrophic medical bill ($20-30K+) wipe out all of those savings?
    Rgds,
    J

    • Great question I receive frequently! Since HSAs can only be established if you have obtained an HSA qualified High Deductible Health Insurance Plan (HDHP), then your insurance policy will cover the major expenses. The HSA is there to help you pay smaller bills. Most HDHP plans also include Preferred Provider Organization (PPO) discounts to help re-price your smaller bills to the insurance company discounts. This helps dramatically reduce the costs of emergency room and hospital visits. Please visit my website http://www.myhsaguy.com/hsa/HSA-faqs.html#whatqualifies to see the current federal guidelines for HDHPs.

      Thanks!

      Scott

  5. Hi Scott:

    I just joined you on Conservative Blogs Central with my blog, The Political and Financial Markets Commentator (http://politicsandfinance.blogspot.com). I enjoyed reading your blog and just wanted to stop by and introduce myself.

    If you can think of any ways to help each other increase traffic including adding each others blog to a blogroll, I would be interested in talking about it.

    Keep fighting the good fight.

    Mike

  6. tks for the effort you put in here I appreciate it!

  7. Good Morning Scott,

    I have a challenge. I work for a company that utilizes a Professional Employer Organization (PEO). Basically, they handle all of our back office stuff (payroll, HR, 401k and benefits). Because we are on a co-employment relationship (for tax purposes only), we are on their (the PEO’s) FSA plan (along with dozens of other companies the PEO provides their services to)…and their FSA plan is on a calendar year cycle (January 1st through December 31st). Now here’s the problem. Our company has a July 1st medical renewal and this July, we are adding an HSA plan to the mix. BUT because our medical plan is on a fiscal renewal cycle, we can’t open an HSA bank account until January 2011 (because we are bound to their (the peo’s FSA plan). They told me that I can use my FSA money towards my HSA expenses, but I want to open my HSA bank account now.

    I was reading about an IRS provision that allows for an FSA rollover into an HSA plan (IRS publication 969 cat no. 24216s page 16). According to this, it would allow individual employees to roll over their FSA into an HSA plan. I brought this to the PEO’s attention, and they stated that since it’s the PEO’s plan, they could not do this. If it was our companies (personal FSA) we could. That doesn’t make sense.

    DO you know if there’s any way for a company on a PEO’s FSA to actually do an FSA rollover into an HSA midyear? Again, we are on a fiscal medical renewal (grrrrr…hate that). Are we really stuck on the FSA until we close the year? Since we are a July renewal, we will have to enroll into the HSA plan now (without the HSA bank benefit) because if we don’t, the next time will be during open enrollment of July 2011. Any info that I could share with our Benefits department and our PEO (to show that it is legal) would be appreciated.

    Regards,
    Taylor

    • You sound a bit frustrated! Let’s see if I can help you. First of all the Department of Treasury issued guidance back on May 11, 2004 that explains how Health Savings Accounts (HSAs) can be used along with Flexible Spending Accounts (FSAs)and Health Reimbursement Arrangements (HRAs) simultaneously.

      http://www.ustreas.gov/press/releases/js1548.htm

      Unfortunately you are probably already enrolled in a regular FSA, and not a Limited FSA which is only to be used for dental, vision, preventive, and some over-the-counter eligible expenses. This will “probably” make you ineligible to fund an HSA account immediately.

      http://www.ustreas.gov/offices/public-affairs/hsa/faq_eligibility.shtml#hsa7

      How’s that for a Treasury Department clarification…

      The good news is that your HDHP will be in force prior to December 1st, 2010 which will allow you to establish and fund an HSA prior to April 15, 2011 and get a 2010 tax deduction. As long as your HDHP remains in force throughout all of 2011 there would be no pro-rating requirement placed on your 2010 contribution. That means individuals can contribute up to $3050, families up to $6150 for 2010. Participants age 55+ can contribute an additional $1000 above that.

      I am glad to hear your PEO is offering you an HSA option!

  8. Hello,

    I read that as of 12/1/10 I no longer can use my HSA for OTC meds. What I read specifically said OTC “drugs”. Do you know about this at all? I’m just wondering if this truly only applies to drugs only, or if it is really saying that I can no longer use my HSA on anything except prescriptions and visits. For example – I used my HSA on items such as Aquaphor, does this really count as an OTC drug, or can I continue to use my HSA on items like that after 12/1? Thanks!

  9. I have a challenge. I work for a company that utilizes a Professional Employer Organization (PEO). Basically, they handle all of our back office stuff (payroll, HR, 401k and benefits). Because we are on a co-employment relationship (for tax purposes only), we are on their (the PEO’s) FSA plan (along with dozens of other companies the PEO provides their services to)…and their FSA plan is on a calendar year cycle (January 1st through December 31st). Now here’s the problem. Our company has a July 1st medical renewal and this July, we are adding an HSA plan to the mix. BUT because our medical plan is on a fiscal renewal cycle, we can’t open an HSA bank account until January 2011 (because we are bound to their (the peo’s FSA plan). They told me that I can use my FSA money towards my HSA expenses, but I want to open my HSA bank account now.
    +1

    • Unfortunately the IRS only allows an HSA to work with “Limited FSAs” as indicated in the May 11, 2004 guidance from the US Department of Treasury

      Although you would not be eligible to set up your HSA at this time, you should be eligible to set one up next year. Any funding prior to April 15, 2012 should still be tax deductible on line 25 of your 1040 for tax year 2011 as long as you let the HSA custodian know you want it to be a 2011 contribution. Unfortunately any medical expenses you have prior to both the HSA qualified health insurance plan (HDHP) and the HSA being established will not be payable out of your HSA account. Hopefully you guessed well when you originally set up your FSA.

  10. Hi Scott,
    I’m self employed, but I have an account with HSA Bank from my previous employer, and a qualifying health insurance policy. I have made contributions to HSA Bank but they do not consider this pre-tax money. I understand there is an issue with being self-employed. Is there anything I can do to make my contributions pre-tax? Is there anything else like this for self-employed people?

    • Virginia,

      This sounds like an unfortunate misunderstanding. Although technically speaking self-employed people do not contribute to their HSA with pre-tax dollars, the deposits are tax-deductible off their personal income taxes similar to an IRA tax deduction. See line 25 of the 1040 pictured in a previous post:

      Maximize Your Tax Deductions for 2010

      The end result is that HSAs do save on federal (and most state) income taxes.

  11. Great Information, Thanks!

  12. Hi Scott,

    I work for a company that has our HSA payroll deductions direct deposited into our HSA accounts and the payroll deductions happen on payday but our HSA deposits lag several days behind. We do not see deposits for up to 5 days after payday. Our HSA has investment opportunity in the plan but with deposits lagging we loose some of that benefit. We were told that is not a big deal for that delay and we can just reimburse ourselves from the account if we pay for a medical need from our pockets. The principle of the situation is that this is our money as of payday and the company does not deposit the monies for several days and we do not have the funds until then and lose the time on the account. Is that normal or is that right? Seems unfair to the employees to have to wait on the funds in their HSA. Is there something we can do other than ask and be told to be patient it will be there?

  13. Hi, I currently have an HSA with Blue Cross that I am very happy with. I understand that the new actuarial rules under ObamaCare could possibly raise my current premium. If I chose to leave Blue Cross and purchase my insurance via my state’s pool, would my health care premium be tax deductible under the new law? Currently, my premium and payroll deductions into my HSA account are done pre tax. Thanks!

    • I believe you are correct in your analysis that ObamaCare will be increasing health insurance premiums. The additional mandated benefits will cost more. Your question mentions leaving your current Blue Cross plan and joining your state pool plan. Existing state pool plans are there to cover people that do not have access to group health insurance and are not healthy enough to qualify for individual health insurance plans. Although they are subsidized by the state, they are still expensive plans. I doubt that would be a good option for you.

      By 2014 ObamaCare mandates each state have a state exchange available that will allow anyone to obtain health insurance regardless of any pre-existing conditions. Depending on your situation, this might be a better option for you. For example; if your current plan has been rated up due to health conditions, then the state exchange plans which cannot charge more for health conditions, might be more affordable. You would have to make that decision yourself when that happens.

      As far as taxes go, self-employed people get to write off both the health insurance premiums (1040 line 29) and HSA contributions (1040 line 25). If you are an employee that is currently payroll deducting health insurance premiums through a section 125 plan, then you only get to write off your HSA contributions. This applies to any plan you purchase outside of an employer group plan.

      You’re Welcome!

  14. […] The HSA Guy – Scott Borden […]

  15. Scott,
    I like your blog! Too bad you’re not located in Texas. Please take a look at the article I wrote a few months back and let me know what you think.

    https://www.budgetdoc.com/blog/health-insurance-is-a-flawed-concept/

    • Jay,

      Most physicians are concerned about the future of healthcare. They need services such as yours to break free from the current regulations and limitations dictated by insurance companies that will only increase under ObamaCare. Doctors and patients should make healthcare decisions together based on what is best for the patient instead of what a third-party payor thinks will cost the least.

      Physicians wanting to go Direct Pay should consider how many more of their patients could afford to pay an annual fee and/or a per visit fee if they weren’t paying too much for their health insurance. Health Savings Account qualified plans are a perfect fit for people wanting to save money on health insurance (and taxes) and not pay for benefits they really don’t need insurance to cover anyway.

      We are licensed in many states including Texas. And Texas is significantly warmer than Kansas City this time of year. Our healthcare solutions are not limited by a little drive / fly time.

      We need to talk!
      Scott Borden
      913-980-4694


Comments RSS TrackBack Identifier URI

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s