Still on the search for the best health insurance plan that will let me contribute to a Health Savings Account (HSA). I need to contact my State Farm agent for one more quote, and then I can start crunching some numbers. First, I wanted to write down some basics of what I’ve found out about HSAs, including Pros and Cons. Overall, I think of them as a Traditional IRA for healthcare expenses.

Who’s eligible:
Anyone under age 65 can contribute to an HSA if they buy a high-deductible health insurance policy. The policy’s deductible must be at least $1,000 for individuals or $2,000 for families.

Pros:
» Contributions are tax-deductible, even if you don’t itemize.
» Portable; Like an IRA, it travels with you, not your job.
» Rolls over each year, unlike a Flexible Spending Account.
» Earnings grows tax fee (also like an IRA).
» No taxes on withdrawals used to pay healthcare expenses.
» Possible to invest in mutual funds to boost long-term returns
» Some companies match contributions to HSAs, like others to 401ks.
» HSAs are inheritable.

Cons:
» You’ll have to pay for everything (at least partially) out-of-pocket, including things like routine visits and prescription meds that you may not have been used to paying for.
» High-deductible health insurance means you have to have money on hand to cover the whole amount if needed.
» Best suited for young and healthy people, if you usually max out your benefits a lower deductible is probably best for you.
» You are limited to certain HSA providers.
» The account and maintenance fees can be high, some don’t let you invest in stocks.
» Watch out for exclusions of pre-existing conditions in the policy.
» Since these have only been around since 2004, there isn’t quite as much competition as would be ideal for a consumer.

How much can I put in?
You can contribute up to the amount of the deductible to an HSA, but no more than $2,600 for individuals; $5,150 for families. And you can add an extra $500 if you were born before 1950 to help with health care costs in retirement.

The biggest health insurance comparison site is eHealthInsurance.com.

School’s keeping me pretty busy, but Open Enrollment ends October 31st, so I need to get going if I’m going to look for alternative health insurance. I’m no expert, but I’m learning – a big website on Health Savings Accounts (HSAs) is HSAInsider.com, and the best rate quote comparison site seemed to be eHealthInsurance.

Going on eHealthInsurance, I typed in my info (male, 27, non-smoker, full-time college student) and actually found a lot of good big-name options. For some reason I thought I’d only find smaller companies. Both Kaiser Permanente and Blue Cross/Blue Shield came with an HSA compatible option for just under $100/month.
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We just entered the Open Enrollment period for my wife’s work, so we have to choose what health insurance options we want for 2006. This is actually pretty good timing since I am now also eligible for health insurance for as a student at my University.

Since I left my job in July, I’ve been added onto my wife’s health plan for an additional $200 pre-tax a month, a pretty good deal. Next year, it’s only going to be $160/month. I don’t have any current health conditions, but I feel it’s very important to stay covered at all times. The insurance plan is a pretty decent PPO, especially if you stay in-network (I don’t really have any preference towards any specific doctor). In-network, the plan has a $200 annual deductible per person, and an annual out-of-pocket maximum (including the deductible) of $1,200 per person. There is a $2,000,000 lifetime maximum benefit.
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I apologize if my post topics are a week late, I am a bit late processing this stuff. Several bloggers have touched upon this subject, all making good points. In light of current events, you can see how emergency funds are important. What if your ‘really stable’ job turns into rubble? At the same time, your house is underwater, and your car is an aquarium. Your online savings account is going to be a bit hard to access without electricity. Even something in a safety deposit box isn’t so safe. I like to think of emergency funds as Real Life Insurance, protecting your current way of life, not protecting against your death. So I’d like to brainstorm different ways of having some backup money first. In no particular order (more like stream of consciousness):

1. Cash – I usually keep less than $200 of cash in the house, but I’m definitely going to put more in the house. No electricity = No ATMs and No credit card swiping machines.

2. Liquid Savings/Checking Accounts – Of course not all emergencies involve loss of power, and having thousands of dollars in cash under your mattress is not going to earn you any interest. And it’s FDIC/NCUA insured.
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We got 1 month of free health insurance, when we got James, but we didn’t renew. My first instinct was “This is a scam. Pet insurance? Give me a break.” But then my wife’s family dog, who is less than 10 years old, broke her back just jumping around the backyard. Two surgeries and $2,400 later, she’s miraculously still with us, and limping about happily. I think the main reason pet insurance has come to be popular these days is due to the recent advances in pet healthcare, and the accompanying costs. Did you know your dog can get MRIs and chemotherapy for cancer? So I decided to take another look at dog insurance.

I lost the name of the company that we got the free month from, so I such searched for some companies available online. The three main ones I found were VPI Pet Insurance, PetsHealth, and PetCare.
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Ok, so here are my final decision on auto insurance (for now until I get all-new quotes), and how it affected my premiums. I’ve also linked the previous entries that talked about each item. Again, these are tailored for my own personal situation and preferences.

Liability Coverage – Bodily Injury/Property
I’m keeping it at $250k per person, $500,000 per accident, $100k property. This is supplemented by my $1M Umbrella Policy. No Change.

Personal Injury Protection – Kept at minimum. No Change.

Comprehensive Coverage – Deductibles – Keeping the $100 deductible. No Change.
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Ok, I’ve been struggling with this ever since Christian at the nameless blog introduced to my head that uninsured/underinsured motorist coverage might not be a good idea. I had it at $250k/$500k/$10k mostly because I thought it was required to maintain my umbrella insurance. It turns out this is partially true. If I keep it like this, I also get $1M coverage for myself and my family under the umbrella policy. However, I can drop that part and still have the $1M liability coverage against being sued by others. And that’s my main worry, being sued by another driver.

There seems to be two schools of thought on uninsured coverage: Either drop it completely, or buy as much as you can afford.
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Ok, I sat down and talked with my State Farm agent. One really annoying thing is that I had certain coverages because I swear I was told I needed them for my $1 million Personal Umbrella Policy. This time, I was told I didn’t need them. I feel somewhat misled, and am seriously considering another agent, but maybe I just misheard. Humph. Here’s what we discussed:

Non-owned Car Coverage – Liability
I drive a company car for work, and also for personal use. This extends my liability (and $1M Umbrella) coverage to that car, so if something happens in it I am covered. It only costs $10/year, and also covers rental cars, so it’s definitely worth it to me. I was told that this was required for the Umbrella Coverage (I think), but it’s not.
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(Continued from Part 1 and Part 2.) In addition to liability, collision, and comprehensive coverage, there are a couple other options to choose from in the car insurance world. These include: Personal Injury Protection, Emergency Road Service (Towing), Rental Car Coverage, Full Glass Protection.

Personal Injury Protection
While Liability covers the other person’s vehicle, PIP covers the medical cost for the passengers in your vehicle, no matter who’s fault it was. Chances are if you already have decent health and disability insurance, you won’t need this coverage. Some states require a minimum amount, like mine. I’m just carrying the minimum.
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The most common advice I hear about how to lower your car insurance premiums is either to drop collision on your car, or raise your collision and comprehensive coverages as high as possible. But first, I think you have to put things in perspective first.

What is collision coverage? Will it go up if I make a claim?
Collision insurance will cover costs related to repairing damages to your car due to an accident with another car (including hit-and-run). Usually this type of coverage is only required when you lease or have a loan on your car. In most cases, if you do get in an accident and make a collision claim, your rates will go up. Some companies will forgive the first accident if you have a certain length of accident-free history. For me I think it’s 10 years.
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Thanks for everyone’s comments about insurers, I’m going to whittle it down to 3-4 major auto insurers, I don’t want to deal with the small fries. My policy expires in mid-July, so I have a bit of time. Now I need to examine my policy coverage levels to see if they are appropriate. There are many components of auto insurance, and I actually understood very little about each until recently.

How much liability coverage do I need?
Liability covers damage you may cause to other people’s property and injuries to the people themselves, including your passengers. It offers protection from lawsuits. Usually each state designates a minimum level of coverage that everyone is required to have, something in the neighborhood of $25,000 per person, $50,000 per accident, and $5,000 property damage.
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I may be purchasing my company car after it goes off-lease. This, of course, means I have to insure it myself along with our current car, and I’ve been meaning to shop around for car insurance again anyways. I’m tempted to get quotes from everywhere, but as I understand it many of the car insurance companies pull “hard” inquiries on your credit report, which will hurt your credit. (Update: I’m not entirely sure about this. This link at Washington Mutual Insurance suggests something different. However, some people have had inquiries from car insurance companies show up on their credit report). So, I’m asking my readers to give me their personal advice and experiences. Which car insurance company do you have? Do you like it? Does it have a good multi-car discount? Which did you switch from? What website did you use to compare prices? Thanks!
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