Thank you for this write up. We are also done with BCBS this year and switching to MHBP. The HSA isn't familiar to us. Is it a separate required contribution out of our pocket or does a portion of bi payments go into it? Or none of those? Thanks for breaking it down.
HSA is like the TSP crossed with the FSA.
you have a contribution limit based on single/married. The contributions are not taxable, the gains in the HSA account aren't taxable, the distributions for qualified reasons aren't taxable* (notice the asterisk and look for it later, it's not some trick, just a mildly complex caveat). You can roll over your funds from inspira to Fidelity, just set up a recurring rollover for the full account balance or whatever it's called.
There is no use or lose aspect to any of this. No carry over limit, no time constraints except your own natural life. It's your money. It is not an FSA. You contribute whatever you want (manually, not through payroll deductions unless you can figure out the allotments into fidelity then maybe but you'll still have to file for your tax credit). Now you go out into the world of healthcare and spend some money.
Let's suppose you have the funds to cover your medical expenses and max your HSA for 20 years and then you retire, this is the ideal situation! You save all those receipts for EVERYTHING medical related similar to how you would for an FSA. Now you're 51 and retired and everything is going great and suddenly you need a home repair of $10k but you're already drawing from your accounts up to the maximum of your current tax bracket (a fundamental understanding of how taxes ACTUALLY work is important here to understand the value in this made up scenario) if the next bracket is 24% that $10k could cost you nearly $14k in income if your retirement accounts are subject to income taxes on distribution. Alternatively it costs $10k. In order to pay for this you could instead submit $10k worth of medical receipts to your HSA and pull the money out tax free and use it for your house repair.
That's right, the HSA is a triple tax advantaged retirement account. The third tax advantage is qualified distributions* (LOOK, AN ASTERISK). You aren't subject to income taxes on contributions, growth, or distributions for medical expenses you've incurred with no time limit. They can be expenses incurred during retirement, or at any point in the past (I'm actually not sure if expenses prior to signing up for the HDHP count). You can pay yourself back in 2050 for the cost of childbirth in 2025.
You can see how the HSA is the most important retirement account you could own. If you're healthy in retirement you get tax free money to spend on whatever you want. If you're sickly and need procedures, pay for them now and get a discount (market growth) on those procedures and use YOUR earnings that cannot be taxed by your dirty uncle sam.
Edit to add. MHBP contributes $2400/year into an inspira HSA that you can move to Fidelity or wherever. You can keep it in inspira as well. Do what you want with it.
Also if you don't know what a deductible is: it's the amount of money you pay out of pocket before your insurance covers even one cent. Your first doctor's visit could cost you $500 for a checkup. That ER visit might hit you with $2k due next month. But then emergency use of the ER is only gonna cost you $50 after your deductible is hit.
