Lee Health Insurance Services https://health-insurance.com Tue, 07 Nov 2017 22:45:32 +0000 en-US hourly 1 https://wordpress.org/?v=6.4.3 Reminder: Anthem Blue Cross Cancellation of IFP Plans in Certain CA Counties https://health-insurance.com/reminder-anthem-blue-cross-cancellation-of-ifp-plans-in-certain-ca-counties/ Tue, 07 Nov 2017 22:45:32 +0000 https://health-insurance.com/?p=716 Reminder: Anthem Blue Cross Cancellation of IFP Plans in Certain CA Counties

(Note: This information concerns those who are on Individual & Family health plans.  It does not concern you if you are on Medicare or an Employer or Employee on a Group-sponsored or Government-sponsored health plan.  This information pertains only to California and does not apply to other states.)

This is a reminder that if you are currently on an Anthem Blue Cross Individual or Family (IFP) health plan (not Medicare or Group plan), and you received a notice from Anthem that your health plan will not be renewed on Jan. 1, then you need to take action by Dec. 15.

On Jan. 1, Anthem will be withdrawing IFP plans from all regions in California EXCEPT for 3. Those 3 regions and the affected counties are listed below.  These include 22 sparsely populated counties in N. Calif., Santa Clara county and 5 counties in the Central Valley.

The IFP plans that are affected include plans within the Covered CA Exchange (On-Exchange), as well as plans outside the Covered CA Exchange (Off-Exchange). They include Subsidized plans as well as Non-Subsidized health plans.  Those who are on Grandfathered IFP plans are not affected.

If you need help securing a plan from an alternate insurance carrier such as Blue Shield, Health Net or Kaiser, please contact me at [email protected] or call 925-284-2000 Ext. 101.

Anthem Blue Cross IFP Plans will be discontinued on Jan. 1 from all CA Counties EXCEPT the following:

  • Northern California: Alpine, Amador, Butte, Calavaras, Colusa, Del Norte, Glenn, Humbolt, Lake, Lassen, Mendocino, Modoc, Nevada, Plumas, Shasta, Sierra, Siskiyou, Sutter, Tehama, Toulumne, Trinity, Yuba.
  • Santa Clara
  • Central Valley: Mariposa, Merced, San Joaquin, Stanislaus, Tulare.

Sincerely,

Phil Lee Lee Health Insurance Services

925-284-2000 Ext. 101

[email protected]

https://health-insurance.com

www.linkedIn.com/in/philwlee

Employee Benefits & Health Insurance

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Reminder: Annual Open Enrollment Period https://health-insurance.com/reminder-annual-open-enrollment-period/ Tue, 07 Nov 2017 03:33:45 +0000 https://health-insurance.com/?p=711 (This information concerns those who are on Individual & Family health plans, and Medicare health plans. It does not concern you if you are an Employer or Employee on a Group-sponsored or Government-sponsored health plan. This information pertains only to California and may or may not apply to other states.)

This is a reminder that we are in Open Enrollment season for several lines of health insurance plans.

(A) For Those Under Age 65 on Individual & Family Plans
Annual Open Enrollment period (AEP) this year runs from Nov. 1 through Jan. 31.
• You may enroll into or change Covered CA On-Exchange (with subsidy) as well as Off-Exchange (no subsidy) plans.
• Competitive Rate Comparison Proposals for On Exchange as well as Off Exchange plans are now available for Jan. 1, 2018. Please let us know if you would like one prepared for you.
• On Jan. 1, Anthem Blue Cross will be terminating their Individual plans in most counties in California except for some in rural Northern California.
• If you received a cancellation notice from Anthem Blue Cross, please contact us for a proposal to show you alternative plans from Blue Shield, Health Net, Kaiser, etc.
• If you received a large rate increase, ask us for a proposal showing alternatives.

(B) For Those Seniors Over Age 65 on Medicare
• For those on Supplement plans, there is NO Open Enrollment Period. Your supplement plans do not require renewal and continue uninterrupted until you cancel it.
• For those on Supplement Plan F, CMS (Center for Medicare Medicaid Services) will prohibit new sales after Jan. 2020. But those who are already on Plan F at that time will be grandfathered indefinitely.
• For those wishing to switch from a Medicare Advantage HMO plan to a Supplement Plan, there is no Open Enrollment and no Guarantee-Issue (GI) unless you have a Qualifying Event (QE), such as a move from out of state. You will wish to review the 13 Guarantee-Issue (GI) situations in CA that you may possibly qualify for. Even if you don’t qualify, there is no penalty for applying and going through the non-GI underwriting (approval) process. Chances are good that you may still qualify based on your health. The process for this type of transition is tricky and the timing very tight. If you think you may want to do this, start this process early to give yourself enough time to receive approval. We recommend that you seek professional assistance from an experienced agent knowledgeable in this area.

(The above is meant to be informational. This information has not been approved by CMS or any regulatory agency. This is not sales material and should not be relied upon to make purchase decisions. We recommend that you consult a knowledgeable insurance agent before making any decisions.)

Phil Lee
Lee Health Insurance Services 925-284-2000
www.linkedIn.com/in/philwlee
www.Health-Insurance.com
[email protected]
Employee Benefits & Health Insurance

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Medicare Open Enrollment Period 2017-18 https://health-insurance.com/medicare-open-enrollment-period-2017-18/ Sat, 14 Oct 2017 03:56:23 +0000 https://health-insurance.com/?p=709 (This information concerns Medicare Health Plans. It does not concern you if you are either on an Employer-Sponsored Group Health Plan or an Individual & Family Health Plan. This information pertains only to California and may or may not apply to other states.)

Medicare Enrollment season is once again upon us.

The Medicare Open Enrollment Period for Medicare Advantage Plans (i.e. HMO, Part D PDP Rx plans) runs from Oct. 15 to Dec. 7.

There is no open enrollment period for Medicare Supplement plans which do not need to be renewed. They continue month to month until cancelled.

Here are some common questions that we have been asked:

  1. When is the 2017-18 Medicare Annual Enrollment Period (AEP)? For most people, Medicare AEP runs from Oct. 15th to Dec. 7th. You may do the following during this time: 1. Enroll or change your Medicare Advantage plan (MA-PD). 2. Enroll or change your Medicare Rx (PDP) plan. 3. Enroll in a Medicare Supplement and a PDP plan (the supplement plan is not guarantee-issue unless you have a qualifying event). Technically, AEP only applies to Medicare Advantage plan.   These plans include Advantage MA-PD (Medicare Advantage-Prescription Drug, mostly HMO) plans as well as Advantage PDP (Prescription Drug Rx Plan) plans. These Advantage plans are regulated by CMS (the federal Center for Medicare & Medicaid Services, which is part of HHS, the federal Dept. of Health & Human Services). Medicare Supplement plans on the other hand, are regulated by the State’s Dept. of Insurance which does not have AEP’s and go by different rules.

(B) Can I Switch into a Medicare Supplement Plan from a Medicare Advantage HMO Plan during AEP? Supplement plans may be purchased anytime, as long as you have Original Medicare Parts A & B. However, if you have an Advantage MA-PD plan currently, you must either have a qualifying event or be subject to medical underwriting. For those who have a Qualifying Event (QE), e.g. their Advantage plan is terminating or moving out of their area at year end, they have until Dec. 31st to enroll into a Medicare Supplement and PDP plan for a Jan. 1st effective date. I recommend that you enroll no later than Dec. 15 because of the holidays as well as the crushing workload of the insurance carriers. For those without a QE, switching to a Supplement Plan is difficult and filled with pitfalls. This process should be started early in the Enrollment season (Oct. 15th), and handled very carefully with assistance from a knowledgeable Medicare insurance agent. It involves medical underwriting (approval based on health). There is no guarantee of approval by a Supplement carrier. And you must not enroll into a PDP plan before you have received approval from a Medicare Supplement carrier, otherwise your MA-PD plan may be cancelled, leaving you with no coverage except for Part A/B.

(C) Is Medicare Supplement Plan F going away? CMS (Center for Medicare Medicaid Services) has announced that they will ban the sale of Medicare Supplement F, the most popular supplement plan, after Jan. 2020.

Anyone who qualified for Plan F before Jan. 2010 will be grandfathered and permitted to keep the plan or enroll indefinitely. However, unless the enrollment is during the initial coverage enrollment period (ICEP), acceptance is not guaranteed. There may be medical underwriting. Those who will turn 65 or become eligible for Medicare after the year 2020 will unfortunately never be able to experience Plan F.
(D) **Are there any instances where one can enroll into Supplement F after Jan. 2020? We understand that anyone who was initially eligible for Plan F before Jan. 2020 would still be allowed to enroll into Plan F even if they enroll after that date.

(D) Are rates for frozen Supplement Plan F (after 2020) likely to skyrocket? Some concerns were raised that the premium for F plans may skyrocket, after 2020, due to there being no future new entrants into the risk pool. Although this is a distinct possibility, it is unlikely to be a cause for alarm for the following reasons: (1) Unlike under age 65 plans, supplement plans are secondary payers (Medicare is the primary payer) and not subject to the brunt of the risk, (2) In the past when older supplement plans were frozen, such as the Anthem Classic J plan, there were no great increases in rates, (3) After the freezing of Plan F, other plans like G and N will still be available. Although these other plans are not as comprehensive as F, (4) The Birthday rule allows members to switch to like, or downgrade plans, guarantee-issue, every year, on their birthday month, (5) Supplements plans are in a highly competitive marketplace. Currently there are over a dozen carriers in CA offering Plan F. This will likely keep prices competitive. The practical implication is that seniors may keep plan F and take a wait and see attitude. If rates go out of line at some point, then simply downgrade, guarantee-issue, on their next birthday.

(The above is meant to be informational. This information has not been approved by CMS. It is not to be used in sales. And should not be relied upon to make purchase decisions. We recommend that you consult a knowledgeable insurance agent before making any decisions.)

Phil Lee

Lee Health Insurance Services

925-284-2000

www.Health-Insurance.com

[email protected]

Employee Benefits & Health Insurance

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Anthem Blue Cross to Discontinue Individual Health Plans in Most Counties in California https://health-insurance.com/anthem-blue-cross-to-discontinue-individual-health-plans-in-most-counties-in-california/ Wed, 09 Aug 2017 07:27:15 +0000 https://health-insurance.com/?p=705 Anthem Blue Cross announced that they will discontinue selling Individual medical plans in CA in 2018 except for three counties, Santa Clara, Stockton/Modesto, and Redding.

I received the following email from Anthem to agents and brokers last week with details about this decision. Please click on the link below:

Anthem Announcement

Please review the following to be sure that you will actually be affected by this:

  • This change only affects those on Individual Health Plans, NOT Employer Group plans or Medicare plans.
  • It affects both On Exchange (Covered California), as well as Off Exchange health plans.  It affects both subsidized as well as non-subsidized plans.
  • It does not affect “Grandfathered” plans.
  • It will take effect on Jan. 1st, 2018.
  • This change does not affect these 3 counties: Santa Clara, Stockton/Modesto and Redding.

We might be able to help you find alternatives as soon as the insurance carriers such as Blue Shield, Health Net and Kaiser release their new rates for Jan. 1, in either September or October.

Phil Lee

Lee Health Insurance Services (BLIS Corporation)

925-284-2000

https://health-insurance.com

www.linkedin.com/in/philwlee  

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California Senate To Vote On Single Payer Bill SB 562 This Week https://health-insurance.com/california-senate-to-vote-on-single-payer-bill-sb-562-this-week/ Thu, 01 Jun 2017 04:41:48 +0000 https://health-insurance.com/?p=688 Last month I alerted you to the introduction of California Senate bill SB 562 that seeks to prohibit all private and public health insurance plans in California and replace them with a single Government-run health plan. Every person living in California will have to give up their existing insurance plan:  employer group coverage, Medicare, Medi-Cal/Medicaid, Covered California, private individual and family health plans and all existing government programs.  Instead, every person living in California will be required to sign up for the single payer plan.

The Senate Appropriations committee’s own budget analyst has estimated the cost to be $400 billion for just the first year, which is over twice the entire California State budget of $180 billion. SB 562’s sponsors have no clear plan for paying for single payer but have suggested new employer and employee taxes and income tax increases.  These taxes would be in addition to current Federal, State, local, municipal and property taxes that Californians pay.

Please see this press release from the California Association of Health Underwriters for more information.

https://bliscorp.egnyte.com/dl/6kk5OkKcvK

I was present in the Senate Chambers when this bill passed the Health Committee with a 5-2 party-line vote on April 26th. I was again present when the Appropriations Committee debated this bill on May 22nd.  But despite serious concerns raised by many of the committee members the bill passed with a 5-2 party-line vote.  It will now be voted on this week by the full Senate.

TO TAKE ACTION:

If you object to losing your right to Medicare, losing your employer plan, paying more taxes, losing your right to choose your doctor, your hospital and your insurance benefits please contact your State Senator to let him/her know. Click on the link below to find your State Senator and his/her contact information.  Then click on the name to reach their website to communicate your message: http://findyourrep.legislature.ca.gov/

For your convenience, this is a letter template suitable for sending to your district Senator if you so choose:

https://bliscorp.egnyte.com/dl/9IOEU956MF

Phil Lee

www.health-insurance.com

925-284-2000

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California Wants to Replace Your Health Plan with a Government-Run Single Payer Plan (SB 562) https://health-insurance.com/california-wants-to-replace-your-health-plan-with-a-government-run-single-payer-plan-sb-562/ Wed, 26 Apr 2017 00:10:22 +0000 https://health-insurance.com/?p=685 The California State Senate is currently working on legislation to make a Single Payer System the only source of health care and health insurance in the state of California.  The Bill is named SB 562 and it will be reviewed by the Senate Health Committee on Wednesday, April 26, at 1:30 PM in the Capitol building in Sacramento in Room 4203.

SB 562 is very bad for you, your family and the future of the State of California for many reasons:

  • Single payer insurance will provide “one size fits all” insurance to all people living in California, including undocumented residents.  One plan will be offered to all Californians for cradle-to-grave health coverage.
  • All Private Health Insurance will be prohibited.
  • The plan benefits will be determined by an un-elected board of special interest appointees of the state government who will determine which benefits will be included and how much providers will be paid.  This will result in rationing health care and force doctors and hospitals to leave the state if they are not fairly compensated for their services.
  • There will be no Medicare for Californians 65 and older. Seniors and the disabled who currently have Medicare, Advantage plans, Supplement plans and Part D plans will be dis-enrolled and enrolled on to the single payer plan.
  • There will be no employer health insurance plans. Employers will no longer be able to attract the best employees in their fields because they cannot offer them benefits that are any better than the Single Payer plan.  If you work for a company that is located in many states, your employer will not be allowed to offer any plans in CA.
  • There will be no Federal or State employee health insurance plans.
  • There will be no union health insurance plans.
  • There will be no Medi-Cal or Medicaid.
  • All people living in California, whether legally or not, will have the same health plan.
  • Doctors and hospitals will be paid for their services by the State of California, who will need to create a monstrous bureaucracy to process and pay claims.  Fraud, abuse and waste are a given.  Other government-run health plans such as Medicare, Medicaid and the Veterans Administration regularly suffer scandals in billing, payments and sub-standard care.
  • State Senator Ricardo Lara, who is sponsoring SB 562, has not revealed how the state is going to pay for “free” health care for all.  Initial estimates are that the State of California would need an increase in current income tax of $350 billion for just the first year of the Single Payer plan. This amount equates to $9,200 for each man/woman/child in addition to what he or she is already paying in income tax.  A family of four would pay $37,000 more in income tax than they are currently paying.
  • Sick people, low-income people and the undocumented from across the country would flock to California.  Healthy taxpayers would flee California.  The result would be long lines to wait for sub-standard health care with costly procedures such as heart and kidney transplants and life-saving drugs rationed or not included at all in the Single Payer plan.
  • Senator Lara and his supporters have stated that California leads the rest of the country in innovative changes and now want to oppose Federal Government deliberations on changes to the health insurance market by being the first state to adopt the Single Payer system.  However, two other states, Colorado and Vermont, recently voted against Single Payer plans in their states due to the unrealistic tax burden it would put on its residents.

CALL TO ACTION:

If you object to losing your right to Medicare, losing your employer plan, being taxed an additional $9,200 per family member, losing your right to choose your doctor, your hospital and your insurance benefits, then please contact your State Senator to let him/her know.  Click on the link below to find your State Senator and his/her contact information.  Then click on the name to reach their website to communicate your message: http://findyourrep.legislature.ca.gov/

Just say No On SB 562 to preserve your choice in health care and to keep California from declining into certain economic ruin.  Thank you for taking the time to read this email.

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Covered California – Urgent Last Minute Alert https://health-insurance.com/covered-california-urgent-last-minute-alert/ Tue, 20 Dec 2016 08:12:29 +0000 https://health-insurance.com/?p=681 (This information concerns those who enrolled into Individual and Family Health Plans through the Government Exchange – Covered California – and received a Subsidy or APTC.  It does NOT concern you if you are either on an Employer-Sponsored Group Health Plan or a Medicare Health Plan. This information pertains only to California and may not apply to other states.)

As a courtesy, we are passing this information onto you.
December 19, 2016

 

Consumer Outreach for Consent for Verification

Yesterday, Covered California sent an email to consumers that are at risk of losing their Advanced Premium Tax Credit (APTC) and/or cost-sharing reductions for their 2017 health insurance coverage.  Consumers need to ensure that they have provided their Consent for Verification as this allows Covered California to electronically verify their eligibility for tax credits.

The following two fields are provided to help identify those consumers who need to provide consent.

  • Years of Consent – provides the number of years the consumer provided consent to using their information for verification purposes.
  • Date of Consent- provides the date the consent was provided by the consumer to use their information for verification purposes.

Without taking action now, consumers who have not updated their consent will lose their premium assistance including federal tax credit and/or cost-sharing reductions (lower copayments, coinsurance and deductibles). Read our Consent for Verification Quick Guide for additional information.

LAST DAY to Enroll for January 1 Coverage

Consumers only have until midnight tonight, December 19, 2016 to enroll in a health plan for coverage beginning January 1, 2017. Plans selected after this time may have a February 1 or March 1, 2017 coverage start date.

 

Covered California Service Centers

Consumers that need last minute application support can contact the Covered California Consumer Service Center for the Individual Marketplace at 800-300-1506, which will be open tonight until midnight.

 

Upcoming Outage

Sunday, January 22 from 8:00 p.m. to Monday, January 23, 2016 at 6:00 a.m.

Phil Lee
Lee Health Insurance Services, BLIS Corporation
800-286-7445
www.linkedIn.com/in/philwlee
www.Health-Insurance.com
[email protected]
Employee Benefits & Health Insurance

]]> Blue Shield of California Plans to Shut Down for 1 Week in September to Save on Payroll Due to Obamacare Losses https://health-insurance.com/blue-shield-of-california-plans-to-shut-down-for-1-week-in-september-to-save-on-payroll-due-to-obamacare-losses/ Sun, 14 Aug 2016 04:56:44 +0000 https://health-insurance.com/?p=671 http://www.bizjournals.com/sanfrancisco/news/2016/08/11/exclusive-losses-blue-shield-california.html

As reported by the San Francisco Business Journal, Blue Shield of California will be closed from September 3 to September 12 while its employees take the week of Labor Day off. Although Blue Shield announced there will be some customer service staff working that week we assume the phone lines will be jammed for the entire week.

It appears that Individual, Small Group and Medicare departments are affected by the shutdown.
We do not yet know whether the Blue Shield member portal, broker portal or employer portal will be accessible and will reflect current information during the shutdown.
ALL APPLICATIONS FOR BLUE SHIELD PLANS SHOULD BE SUBMITTED AS SOON AS POSSIBLE SO THEY CAN BE PROCESSED WITH AN ID NUMBER ISSUED BY FRIDAY, SEPTEMBER 2. APPLICATIONS ARE CURRENTLY TAKING 10-14 DAYS TO BE PROCESSED.
This is an unprecedented announcement by an insurance company. We will do our best to provide service to our clients during this shutdown, but if Blue Shield is closed our ability to provide customer service will also be severely impacted.

(NOTE: This information relates only to Blue Shield of California, a taxpaying non-profit insurance carrier that operates only in California. Please do not confuse this company with Anthem Blue Cross, or any other Blue Cross or Blue Shield organization in states outside of CA.)

Phil Lee

Lee Health Insurance Services (BLIS Corporation)

www.health-insurance.com

925-284-2000

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Understanding Special Enrollment Period (SEP) and Qualifying Events (QE) https://health-insurance.com/understanding-special-enrollment-period-sep-and-qualifying-events-qe/ Sat, 12 Mar 2016 02:55:11 +0000 https://health-insurance.com/?p=666 (This information concerns Individual & Family Health Plans. It does not concern you if you are either on a Medicare Health Plan or on an Employer-Sponsored Group Health Plan)

The year-end Open Enrollment Period for Individual Health Plans ended on January 31, 2016.  However, certain individuals may still be able to apply for a health plan in 2016. This special circumstance is called the Special Enrollment Period (SEP).  You need to have a Qualifying Event (QE) to qualify.  Here’s what you need to know.

You can buy health coverage outside of the open enrollment period when you have a qualifying life event—through a special enrollment period (SEP).  Most SEPs last 60 days from the date of the qualifying life event.
Qualifying life events for a SEP include:

  • Getting married or entering a domestic partnership
  • Child aging off a plan
  • Gaining a dependent or becoming a dependent through marriage, birth, adoption, or placement for adoption or foster care
  • Permanently moving to a new area that has different health plan options
  • Employer coverage not being considered minimum essential coverage
  • Losing other healthcare coverage that is considered minimum essential coverage, such as due to job loss, termination of employer health plan by the employer or expiration of COBRA coverage
  • Returning from active military service
  • Change in eligibility for advance premium tax credit or cost-sharing subsidies

Please note that voluntarily terminating other health coverage or being terminated for not paying premiums is not considered a qualifying event.

All insurance companies will require written proof that you have an acceptable qualifying event.  When enrolling during an SEP, please make sure to include qualifying events verification documents in the application.

This is a link to Blue Shield of California’s interpretation of the ACA laws regarding SEP and QE’s.  Different carriers may have slightly different interpretations and requirements.

https://bliscorp.egnyte.com/dl/QJhtXag1KT

Phil Lee

Lee Health Insurance Services (BLIS Corporation)

www.health-insurance.com

925-284-2000

www.linkedin.com/in/philwlee   www.yelp.com/biz/lee-insurance-services-lafayette-7Affordable

 

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HSAs Offer More Advantages Than 401K — Wall Street Journal article https://health-insurance.com/hsas-offer-more-advantages-than-401k-wall-street-journal-article/ Sat, 12 Mar 2016 02:43:15 +0000 https://health-insurance.com/?p=664 Dear Friend,

For years, we have been suggesting to many of our clients that HSAs (Health Savings Accounts) frequently offer more benefits and flexibility than pension plans such as IRA’s.  This article from the WSJ appears to agree with that.

We are obviously not suggesting that you replace pension plans with HSAs, but in many instances, you may want to contribute to an HSA before a pension plan, or use the HSA to increase your tax-sheltered contribution limits.

I welcome your comments.

Sincerely,

Phil Lee

Philip W Lee, Lee Health Insurance Services www.health-insurance.com 800-286-7445

 

Wall Street Journal, Jan. 29, 2016:

HSAs Offer Tax Benefits Beyond 401(k)s

Health-savings accounts can be used to cover medical costs, a major expense, in retirement

Most people overlook health-savings accounts, or HSAs, as a retirement-savings vehicle. A SeniorsPLUS networks representative talks with a Bangor Savings Bank official in Maine. PHOTO: GORDON CHIBROSKI/PORTLAND PRESS HERALD/GETTY IMAGES

By

ANNE TERGESEN

January 29, 2016

27 COMMENTS

When saving for retirement, there is a place to put money that may be even better than your 401(k).

Most people overlook health-savings accounts, or HSAs, as a retirement-savings vehicle. But these accounts, which were authorized in 2003, come with more tax advantages than 401(k)s and individual retirement accounts when used to cover medical costs, which are a major expense in retirement.

“It’s the most tax-preferred account available,” says Michael Kitces, director of financial planning at Pinnacle Advisory Group Inc. in Columbia, Md. “Using one to save for retirement medical expenses is a better strategy than using retirement accounts” to cover those expenses, he says.

As with a traditional 401(k) or IRA, an HSA allows you to set aside pretax money without paying federal or state income tax on it. Most people who contribute through payroll deductions also save 7.65% in FICA tax, which finances Social Security and Medicare.

Money in HSAs grows tax-free and, if used for medical expenses, can also be withdrawn tax-free. In contrast, with a traditional 401(k) or IRA, you pay income tax on your withdrawals.

A lot of people don’t think about how to save for health care in retirement, yet it’s one of the major expenses people will have.

—Roy Ramthun

Due to this combination of tax advantages, HSAs—which are paired with the HSA-qualified health plans available on health-care exchanges and offered by 43% of employers—can even be a better deal than a 401(k) with an employer matching contribution. That is most likely to be the case if you are in a high tax bracket and the 401(k) match is less than dollar for dollar, says Greg Geisler, an associate professor of accounting at the University of Missouri-St. Louis.

For people with a high deductible health plan, “an HSA should be either the first or second place they look to save” for later life, Prof. Geisler says.

To open an HSA, you must be covered by an HSA-qualified health plan. For 2016, these plans have deductibles of at least $1,300 for individuals and $2,600 for a family. In return for exposing policyholders to potentially higher out-of-pocket costs, the plans generally charge lower premiums and offer individuals and families the chance to save up to $3,350 or $6,750 a year, respectively, in an HSA. (Those over 55 can save $1,000 more).

ENLARGE

Because employers save on premiums too with a high-deductible plan, many contribute to employees’ HSAs as an incentive to get them to enroll, says Eric Remjeske, president of Devenir Group LLC, which advises banks offering HSA investment platforms.

The biggest payoff with an HSA comes when the money set aside isn’t all used for current medical bills and instead compounds over time, before being used for qualified expenses. Those expenses can include not just medical bills but also dental and vision-care expenses, Medicare premiums and a portion of long-term-care insurance premiums.

According to Fidelity Investments, a 65-year-old couple who retire today and live another two decades will spend $245,000 on expenses including Medicare premiums and the 20% of medical costs Medicare doesn’t cover—a number that doesn’t include dental and long-term-care expenses.

“A lot of people don’t think about how to save for health care in retirement, yet it’s one of the major expenses people will have,” says Roy Ramthun, president of HSA Consulting Services in Silver Spring, Md.

Once you are enrolled in Medicare you can no longer contribute to an HSA. But you can continue to tap your HSA balance for medical expenses for yourself, your spouse and any dependents you may have.

You can also use your HSA for nonmedical expenses, but you will owe income tax on your distributions—and a 20% penalty if you are younger than 65.

Experts recommend that those who can afford to contribute to both an HSA and a 401(k) kick in the maximum to both. And what if that isn’t feasible? If you don’t incur much in the way of medical bills and can sock away a significant portion of your HSA contributions for retirement, the HSA has an edge, says Mr. Kitces. Some employees may want to allocate enough dollars to a 401(k) to get the company match and then direct the next dollars of savings to the HSA.

Some people go so far as to suggest maximizing the balance in an HSA by opting to pay current medical bills in cash, rather than tapping the HSA. Here, the advice is less clear, says Mr. Kitces.

While the HSA will “get better tax treatment in the future,” you will pay a price for preserving it since you will likely have to pay your current medical expenses in after-tax, rather than pretax, dollars, he says. “You have to decide whether it’s worthwhile to spend more today” on your medical bills “to get more dollars into a tax-free medical account that’s turbocharged for the future,” he adds.

Some people stockpile medical receipts for many years and file for reimbursement in retirement to create tax-free withdrawals to supplement their income in years in which tapping other accounts would push them into a higher tax bracket.

If your goal is to use an HSA to save for medical expenses in retirement, be sure to invest the account in a diversified portfolio of stocks and bonds. (If you don’t like your HSA’s investment options, you can transfer your money tax-free to an HSA elsewhere.) By leaving your contributions in a low-risk option like a money-market fund, you won’t get much return, which limits the tax-free growth that is one of the HSA’s biggest advantages, says Mr. Kitces.

Write to Anne Tergesen at [email protected]

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