Eric is in Lexington Kentucky hi Eric how are you I'm better not deserved a bank cool how can I help I got a question about insurance I've been working for the past couple years as a temporary at a factory but I just received word that in about a month I will be hired on full-time good and so with that comes new insurance mm-hmm and.
This is the first time in the good number of years that I've I will be offered HSA mm-hmm and I recall you mentioning that thank you says you have one yes I wonder the the advantages of it what kind of questions I should ask make sure it's it's the good one for myself in my family all right 97% of the people and other team members.
And Ramsey solutions using HSA we offer a PPO but we don't recommend it and I personally use an HSA the what the HSA is is a large a high deductible lower premium because it's a high deductible health insurance plan and most of them have a hundred percent coverage once you meet the deductible but the deductible is high.
It'll be like five thousand bucks or seven thousand bucks or something like that but once you meet it it's a hundred percent coverage after that for most of them check yours and see some of them have a copay but most of our hundred percent after that does the second thing then is is that you're allowed to invest.
Money into a savings account pre-tax meaning you don't get taxed on the money in order to pay out-of-pocket medical bills like covering that ductile as an example and so if you had a thousand dollar medical bill and you just paid for it with after-tax dollars versus pre-tax dollars if you pay for with pre-tax dollars it's kind of like using.
Seven hundred fifty or six hundred and fifty dollars to pay for it a thousand dollar bill because you didn't get you get the tax break on the money going through it's tax-free money to pay your medical bills with running through that HSA and so through the savings account itself so if you can fund that even if you don't fund that the plan is.
Just cheaper premiums is what it amounts to and but here's what it works best for it that that high deductible and covers a hundred percent after that plan if again not all of them are that way but most of them are it works really good if you're very very sick or someone has chronic illness all the time so you're always.
Blowing through the deductible you come out cheaper with this because it picks up a bunch of it at it keep picks up hundred percent after that the other time it works out great is if you're really healthy like the Ramseys we don't use insurance hardly at all I haven't ever in my life knock on wood but I mean very very few health claims on me and.
Sharron and even when our kids would home with the kids so we very seldom use the health use the went through the deductible and what that means is we just ended up with cheaper premiums okay so that's how it works and that's what the advantages are your self insuring I'm sorry the investing part is that that's an addition to the premium you.
Know yes yes the premiums are cheaper on the insurance portion but then you can choose if you want to to put money into the HSA now I would not put money in there until you've gotten through baby step three unless you have a known medical event coming up and you want to put enough money in there to cover that event in a.
Given year yeah I already there working on and off the mortgage okay cool then you might want to use it as a methodology for saving that's what I've been doing but again I haven't used it I've got almost 150,000 bucks in the stupid thing because I've never used it I just keep throwing the money in there and it's actually become another become.
One of the few tax-free things I can still do because of my income being high okay so it's it's a cool I'm a big fan of the HSA I think it would have solved a lot of things had we leaned on that instead of some of the stupid Obamacare stuff we did but I think it was the way to go and I we maybe we'll go back there when before the nation goes broke trying.
To fund this other crap but um it's a mess alright that's the deal man Thanks hey guys Rachael Cruz here hope you enjoyed that video from the Dave Ramsey show if you want to watch another great video check out my video three things you should consider renting right over here or click the link in the description below.