<p>Isn't it strange that we are getting all these different responses?</p>
<p>I am going to go with the UCB response as that is where my son is attending.</p>
<p>Blake....the only reason we signed up for the High Deductible Health Plan (a HDHP is required if you want to open a HSA) is that it made our health insurance premiums drop from over $10K to $6K per year (our deductible is $2,700 per individual and double that per family). </p>
<p>It doesn't appear that having a HSA will lower our EFC that much.</p>
<p>I was unsure of my Flexible spending account for uncovered medical costs AND my Health insurance premiums, both of which are taken out pretax. So finally I called up the FAFSA hotline and the answer was NO, neither of these is added back in on Worksheet B. </p>
<p>Seems strange to me too, these funds are not available to pay for college, but neither are 401's and other retirement money taken out pretax that must be added back into income. I think I've done my best to answer correctly, so I'm going to submit my corrected FAFSA :)</p>
<p>Think of it this way: Like FresnoMom, I have a HSA because of the savings on health insurance premiums. We're talking several thousand dollars annually that would have to be paid to the health insurance company, but can be banked instead.</p>
<p>Health insurance is not really an option: it is a necessity, like paying the rent or a utility bill. So whether I pay out $5000 in insurance premiums, or $3000 in premiums and $2500 to the HSA -- I am essentially pre-paying for medical expenses. The HSA gives a little more flexibility, but it still is only a pre-paid medical account. </p>
<p>Retirement savings are important, but they aren't absolutely essential - especially for a family that already has a good account built up. So for purposes of financial aid, it makes some sense that the college will add that back in to income <em>available</em> for college spending. One way or another, you have to pay your medical bills this year -- but you can optionally defer or reduce retirement contributions during the years when you are paying out your kid's tuition. </p>
<p>So the rationale may be that the HSA dollars is money spent for <em>current</em> medical expenses (even though there's a potential of accumulating the money from year to year) -- whereas the retirement contribution is merely a way of banking your current income. </p>
<p>Also, despite the answer given to momofthree, I'm not reporting my HSA balance unless and until someone can show me in writing where it says I have do that, either in the FAFSA written instructions or official regs concerning FAFSA. It just is not an asset that is available for college spending.</p>
<p>Remember, too, that Congress uses tax and financial aid policies for public policy purposes. The rationale would seem to be to encourage the use of health insurance and HSAs (one of W's pet ideas).</p>
<p>ya but
we * dont* have money in a medical account( bad previous experience with not being able to get funds out that we never got back)- still we paid out thousands of dollars in uncovered medical expenses.
However- those expenses don't make any difference to taxes we paid when used as "medical deductions"- & I suspect if I mentioned them on PROFILE they would not adjust EFC ( they haven't in past)</p>
<p>So if I understand it right if all that money was taken out pretax- it lowers my reported income for FAFSA-and I don't have to pay income tax or soc security either on it?</p>
<p>Sounds like a good deal- but what do they say to people who aren't able to take advantage of that, bend over?</p>
<p>I think, in theory, "everybody else" has great full health coverage provided by their employer and HSAs give the self-employed guy an opportunity to choose between low deductible high $ benes (which are deducted from business earnings to some degree) and a high deductible (mine is $5000) with the option to put a portion of that deductible in a medical savings account...so it is supposed to replace the higher premiums and, perhaps, encourage more involvement with keeping medical expenses to a more reasonable level. I know my sister, a teacher with low copays, uses doctors much more readily than I do, as do both sets of parents, with full coverage retirement health benes and Medicare. As to those people without either the HSA or the good employer coverage, EK, I think you have it about right...grab your ankles and pay 10x what the procedure should really cost, since all the insurance companies are negotiating lower fees and since all the Medicaid people are paying almost nothing. Personally, I think I could afford to pay what it actually costs for my care, it's covering all the other on-payers that kills me....$100 for a visit to the doctor when you KNOW from experience that you need a certain antibiotic is ridiculous!</p>
<p>we have insurance, even union negotiated insurance- but it covers less and less every contract & there are also so many doctors that don't even take insurance.
and so many procedures and expenses that are barely covered, and we are pretty healthy- but our eyes are bad-</p>
<p>I think more people don't have good insurance, but I agree, others do.
My mother for example has much better dental coverage than we do and is going about every month to have some crown redone.
On the other hand my 24 yr old daughter doesn't have * any* insurance...</p>
<p>Yep, I am amazed at the coverage of some government employees..school teachers etc and of my parents and my in laws and some other friends at very large companies. Things like dental, orthodontia, and vision are so rarely covered and are crazy expensive!</p>