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Q. Jeff, I want to ask your opinion
regarding Health Savings Accounts. On April 1st, the company I work
for is changing our current Blue Cross health insurance to Guardian
Insurance set up as a HRA. I am single and currently have a $500
deductible. Under the HRA, the deductible will be $2,000.
Currently, the premium is split 50/50 between employer and employee.
I pay $205.00 per month. Under the HRA it will still be split 50/50,
but the employer is going to fund each employee's Personal Medical
Fund up to $900. As I understand it, my responsibility will be
$1,100 of deductible before any insurance coverage kicks in. We have
not been given any rates for the HRA insurance, but I imagine it
will be lower than the monthly $205.00.
I am trying to decide if this is a "good" thing to change to or if I
should obtain an individual policy of my own. I contacted my
insurance agent and was quoted a price of $213.20 per month for
similar insurance ($500 deductible).
I assume a portion of the amounts I pay in to the "fund" would be
tax deductible, but I am still not sure that a HRA is the right
thing for me to do.
A. A lot will depend on your health status and how much you use your
insurance. If you’re healthy and don't take many medications, then
the HRA could benefit you because the amount the company contributes
to your account is yours and can grow from year to year.
On the other hand, if there’s a good chance of using your coverage,
then the HRA might be more expensive because the amount of
deductible you’ll have to pay, although it sounds like the company
is paying $900 toward your $1,100 deductible. Private insurance most
likely will not cover any existing conditions and it’s very likely
that you will see those premiums rise at a faster rate then those of
the HRA/HAS.
The days of company paid health plans are quickly coming to an end
and employees will have to bear much more of the cost. This may help
the overall situation in the long run because people may not seek
medical care as often if they have to cover a portion of the cost.
Companies are being forced to explore these alternatives to remain
competitive in today’s global environment.
Q. I was reading your estate planning article about a power of
attorney (POA). I thought your spouse automatically had POA. Do I
need to state that I want my husband to have POA? Can you name a
secondary POA? We travel a lot and if something would happen to us
both, I would want one of my children to have POA.
I have just moved to Florida from up north, is my will still legal
here?
A. First, just because you are married does not mean that your
spouse automatically serves as your POA. There are also two kinds of
Powers of Attorney—one for assets and one for healthcare. A spouse
CAN make medical decisions for you, but if you have a checking
account or own property in your name only, there's nothing your
spouse can do to touch it before or after you become incapacitated.
Your spouse (or anyone else you desire) would need to be named as
your Power of Attorney. And you can have multiple people mentioned
who would serve in succession.
For instance, your husband can be named as your primary
attorney-in-fact, your child as secondary, etc. If your husband were
unable or unwilling to serve as your attorney-in-fact when you
became incapacitated, your child would then be able to.
Your Will should still be legal even though it was written prior to
moving to FL. Florida does have certain homestead exemption laws
that your previous state may not have had. So even though your
existing will is valid, it may be worth having a FL attorney review
it and your situation to make sure there aren't any changes that
could benefit you.
I love to answer readers’ questions. Submit your question at
www.guardingyourwealth.com/askjeff.htm. I’m in the enviable position
of not having to garner new clients and I’d be glad to give you my
unbiased opinion.
Read answers to questions other readers have asked on the Q&A page
at www.guardingyourwealth.com.
In addition to being a nationally syndicated columnist and Certified
Financial Planning Practitioner, Mr. Voudrie serves clients
nationwide using a proprietary money management system he's
personally developed.
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