Blog

FSA vs. HSA: Which is Right for You?

You’ve probably heard of an FSA, or flexible spending arrangement, and an HSA, or health savings account. Both allow you to set aside pretax dollars for future health care expenses, but each has different rules.

Here’s a basic overview of FSAs and HSAs that may help you decide whether to enroll for 2024 or make changes to your current enrollment.

FAQ's about FSA and HSA

Am I eligible to contribute?

FSA: Only if your employer offers this benefit.

HSA: Only if you have a high deductible health plan (HDHP). Your employer may offer one or both. You can get them on your own, too.
‍

What do they cover?

Both: Qualified medical expenses for you, your spouse and your dependents.

What happens if I leave my job?

FSA: You can’t take it with you. You may have a limited time to spend your balance.

HSA: It always belongs to you.

What’s the annual contribution limit?

FSA: The limit for 2024 will be announced later this fall by the IRS. The limit does not increase if your spouse or dependents get health coverage through your employer.

HSA: $4,150 for 2024 if your health plan only covers you, and $8,300 if it covers your spouse or dependents. Add $1,000 per eligible adult who is 55 or older.

What happens to my balance at the end of the year?

FSA: You must use it or lose it by Dec. 31. Some employers offer a grace period or limited rollover to the following year.

HSA: Nothing. There’s no deadline for using your balance.

Get in touch if you have questions about FSA's, HSA's or your health insurance coverage.

‍

Should You Have Long-Term Care Insurance?

When you’re young, buying long-term care insurance may seem unnecessary—and it generally is.

But, in 2021, according to the American Association for Long-Term Care Insurance, people who bought a long-term care policy at age 65 had a 50% chance of using it. Do you know how long-term care insurance could protect you?

How Long-Term Care Insurance Might Benefit You

Long-term care can include help at home, adult day care, nursing home care, assisted living and other arrangements.

Americans’ out-of-pocket costs for long-term care can be thousands per month and are likely to grow over the years. If you qualify for long-term care insurance, it can offset hefty daily care expenses up to the limit you choose when you purchase your policy.

Key Considerations for a Long-Term Care Policy

When shopping for long-term care insurance, you’ll find many coverage options with corresponding policy premiums.

Most long-term care policies limit how long they will provide benefits or how much they will pay. More generous policies cost more.

To keep up with growing costs, you may want to shop for a policy with benefits that increase as inflation rises. This feature will also cost extra.

If your policy barely fits your budget, future premium increases could cause you to reduce or drop your coverage.

When to Buy Long-Term Care Insurance

Your age and health at the time you apply affect how much you’ll pay for long-term care coverage. If you wait too long, or have serious health conditions, you may not qualify at all. AARP suggests that getting coverage between the ages of 55 and 65 may offer the best value.

If you or someone you know needs long-term care insurance, reach out for help weighing all your options.

‍

‍

‍

Life Insurance is for Young Adults, Too

If you think you don’t need to apply for life insurance in your 20s and 30s, you might want to reconsider. Buying a policy as a young adult has several benefits worth taking advantage of, even if you’re single or don’t have children.

Locking in Lower Premiums

Age is a key factor in how much you’ll pay for life insurance. The younger you are, the less likely you are to pass away. The insurer’s risk is lower, so they charge you less. And with a level term policy, you can lock in low premiums for up to 30 years.

Securing Coverage While You're Healthy

Young adults can certainly have preexisting conditions, even serious ones. But in general, people are healthier when they’re younger. Since your health is another key factor in how much life insurance costs, you may be able to purchase a large amount of coverage for a relatively low price when you’re young.

Creating a Safety Net

What if you’re not healthy now? Insurers still offer policies to people who are sick. They might cost more or have a waiting period before coverage kicks in, but they can still provide an important safety net.

If the worst happens, the policy’s death benefit could help your loved ones with final expenses. Also, some policies offer accelerated death benefits. This means you could get a cash payment while you’re alive to pay for medical treatment, take a memorable trip, or pay the rent if you get a terminal diagnosis.

If your health improves, however, you can apply for a new policy and try to secure a better rate.

Buying life insurance might feel overwhelming, but help is available. If you’re uncertain about your life insurance coverage and have questions, reach out anytime. We would love to help you find the best option for your situation.

‍

‍

‍

Understand How Coinsurance Affects You

Have you ever received a medical bill or benefit statement and been confused by the terminology? Most of us have, and it can be frustrating to not understand what you owe and why.

For instance, if you’re unsure what coinsurance is, here’s what you should know.

What is coinsurance?

Coinsurance is a percentage of a covered service amount after you’ve met your deductible. This percentage varies by insurance plan. Here’s an example of how coinsurance might apply to a medical bill you receive:

• Cost: $10,000
• Deductible: $2,000
• Coinsurance: 30%

If you’ve met your deductible this year, you’d owe $3,000 and your insurance would pay $7,000.

If you’ve only paid $1,000 toward your deductible, you’d first owe the remaining $1,000 deductible. After subtracting that payment from your $10,000 bill, you would also owe 30% coinsurance on the $9,000 balance, or $2,700. Your out-of-pocket cost would be $3,700.

Most insurance plans also have a maximum amount they can require you to pay out of pocket for the year. If your maximum out-of-pocket limit for the year is $5,000, once you’ve paid that amount toward your deductible and coinsurance, your insurance company would pay 100% of your remaining covered services for the year. Coinsurance would no longer apply.

Is a copay different from coinsurance?

A copay is an out-of-pocket expense you might pay as a flat fee for medical services like prescriptions, provider visits and emergency care. Copays apply whether you’ve met your deductible or not and are due immediately. Not all insurance plans charge copays, but many do.

What are your health care coinsurance costs?

If your deductibles and coinsurance percentages aren’t printed on your insurance identification card, you can find them by reviewing your policy documents, calling your insurance carrier or logging in to your insurer’s website.

If you’re uncertain about your health insurance or life insurance coverage and have questions, reach out anytime. We would love to help you find the best option for your situation.

‍

‍

‍