Walgreens health insurance offering HSA in 2018

[pezdispenser]

Looks like Walgreens will finally offer a health insurance plan that is eligible for a Health Savings Account. You can contribute $3,450 single/$6,900 family tax free, it does rollover and you can take the account with you if you leave Walgreens.

The money can be invested in mutual funds and the earnings grow tax free: Health Savings Account (HSA) Mutual Funds

Withdrawals used for health expenses are tax free, and you can make withdrawals after 65 for any reason non-healthcare related, but they will be taxed. This makes it like a 401k or IRA.

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[DesiRX]

i am assuming this applies to rite aid stores that are being converted to walgreens as well?

 

[pezdispenser]

i am assuming this applies to rite aid stores that are being converted to walgreens as well?

I'm not sure. The Walgreens open enrollment period is Nov 1-22, so unless you're already converted you might have to enroll in your Rite Aid plan for now and wait until the next open enrollment for 2019. This is of course providing that Walgreens doesn't just transfer the Rx files and close your store.

 

[drakegrad2011]

Looks like Walgreens will finally offer a health insurance plan that is eligible for a Health Savings Account. You can contribute $3,450 single/$6,900 family tax free, it does rollover and you can take the account with you if you leave Walgreens.

The money can be invested in mutual funds and the earnings grow tax free: Health Savings Account (HSA) Mutual Funds

Withdrawals used for health expenses are tax free, and you can make withdrawals after 65 for any reason non-healthcare related, but they will be taxed. This makes it like a 401k or IRA.

I got the information today as well. Will be interested to see what the deductible will be on the plans that go with the HSA. If only you could choose the HSA plan and still get the $5.00 copay for Walgreen Clinic visits, it would be a no brainer (since from reading it looks like 100% is out of pocket until a deductible is met). Guessing the PPO plan costs will probably rise this year since they are offering the HSA plan as well?

 

[Amicable Angora]

Looks like Walgreens will finally offer a health insurance plan that is eligible for a Health Savings Account. You can contribute $3,450 single/$6,900 family tax free, it does rollover and you can take the account with you if you leave Walgreens.

The money can be invested in mutual funds and the earnings grow tax free: Health Savings Account (HSA) Mutual Funds

Withdrawals used for health expenses are tax free, and you can make withdrawals after 65 for any reason non-healthcare related, but they will be taxed. This makes it like a 401k or IRA.

Although this does not apply directly to me, thank you for always posting solid, SOLID financial advice.

 

[WVUPharm2007]

The temptation will be there to spend it like a traditional IRA, but I know it's a good idea to have a battle chest of HSA money for retirement medical expenses. I hope Wags HSA has good plan choices available. CVS's has a lot of low expense indexes from Vanguard and Schwabb available. People **** on CVS (for good reason), but their tax-advantaged savings options are pretty damn solid.

 

[Dred Pirate]

I got the information today as well. Will be interested to see what the deductible will be on the plans that go with the HSA. If only you could choose the HSA plan and still get the $5.00 copay for Walgreen Clinic visits, it would be a no brainer (since from reading it looks like 100% is out of pocket until a deductible is met). Guessing the PPO plan costs will probably rise this year since they are offering the HSA plan as well?

the whole point of an HSA is that it has to be tied to a high deductible plan - basically since the plan is cheaper, the point is to push you (when you are younger/healthier) to take that savings and put it into the HSA to let it grown and be bigger when you need it

 

[drakegrad2011]

the whole point of an HSA is that it has to be tied to a high deductible plan - basically since the plan is cheaper, the point is to push you (when you are younger/healthier) to take that savings and put it into the HSA to let it grown and be bigger when you need it

Yeah I understand the high deductible part of having an HSA plan but it's just that the lower plan options Walgreens usually offer have a high deductible as well. For example, this year the HSA plan has a 6K deductible per family but so does the regular bronze PPO plan, and the HSA plan is only around $12.00 cheaper a pay period for a family. So it's basically just a way for you to invest money for future medical use, there is really not that much cost savings.

 

[Ziyan]

New grad here. I know to contribute at least 4%, but which available wags 401k investment option is prudent? I don't recognize any of the available firms.

 

[Charcoales]

New grad here. I know to contribute at least 4%, but which available wags 401k investment option is prudent? I don't recognize any of the available firms.

Yeah I was wondering this also, do they have a plain and simple like vanguard with low fee and is highly diverse?

 

[PharmDminus]

Yeah I was wondering this also, do they have a plain and simple like vanguard with low fee and is highly diverse?

yes, the target date funds in wag 401k are solid. very low expense ratio. ser it and forget it

 

[WVUPharm2007]

I have no idea what Wags offers. Look for low expense ratios and diversification. And you should save more than 4%. If you are a pharmacist, you should really be maxing 401k out. As well as Roth IRA and HSA. Start in your 20s and retire a millionaire.

 

[Ziyan]

And you should save more than 4%.... you should really be maxing 401k out. .

Thank you, yes I agree with the first part, but my preferred nest would be tIRA, my rationale being better investment options. What benefit would come from maxing out 401k? Forgive me if it is a dumb question (I am still learning retirement strategy).

 

[pezdispenser]

New grad here. I know to contribute at least 4%, but which available wags 401k investment option is prudent? I don't recognize any of the available firms.

The Target Retirement funds are ok if you just want one fund, because the expense ratios are very low at 0.06%. However, I don't really like their underlying investments.

This is the makeup of the Target Retirement 2055 Fund:
Northern Trust US IMI Index Fund - Non Lending 38.33% [Total US stock market]
Northern Trust ACWI ex-US IMI Index Fund - Non Lending 34.68% [International stocks]
Northern Trust High Yield Fund - Non Lending 9.09% [Junk bonds]
Northern Trust Global Real Estate Index Fund - Non Lending 5.43%
Northern Trust Commodity Fund - Non Lending 3.59% [Gold, oil, etc]
Northern Trust 1-10 Year TIPS Index Fund - Non Lending 1.77% [Treasury Inflation Protected Securities]
Northern Trust Aggregate Bond Index Fund - Non Lending 7.10%

You can build a decent portfolio without the bonds, REITs, commodities and TIPS using these index funds:
S&P 500 Index Fund (0.02% Expense Ratio) 50%
Russell Small Cap Completeness Index Fund (0.04% ER) 30% [extended market fund that covers all US stocks smaller than the S&P 500]
International Stock Index Fund (0.08% ER) 20%

You can start moving to bonds as you get older.

 

[pezdispenser]

Thank you, yes I agree with the first part, but my preferred nest would be tIRA, my rationale being better investment options. What benefit would come from maxing out 401k? Forgive me if it is a dumb question (I am still learning retirement strategy).

You won't be eligible for a tax deduction on tIRA contributions if your income is over $63k, so you will have to use your 401k. The 401k index funds that I wrote above are pretty much all you need, and as cheap as you can find in a tIRA anyway.

You can contribute $18,500/yr to a 401k, and Walgreens does have pre-tax or after-tax Roth 401k, but I recommend pre-tax contributions. This way, you don't pay tax on the contributions at your current tax bracket (24%), and it will grow and compound tax free until you retire and make withdrawals which will then hopefully be taxed in a lower tax bracket.

You should be saving around 15% for retirement. For a pharmacist's salary this pretty much coincides with the $18,500 401k max, so you could just do that. If you want to focus on paying off student loans for 2-3 years that's ok, but realize that you'll have to play catch up and put 25%+ into your retirement savings after that. At least there are other ways to get tax benefits beyond the 401k, like the HSA, back door Roth IRA and 0-15% long-term capital gains tax in a taxable account.

 

[gwarm01]

Thank you, yes I agree with the first part, but my preferred nest would be tIRA, my rationale being better investment options. What benefit would come from maxing out 401k? Forgive me if it is a dumb question (I am still learning retirement strategy).

I'm just going all in because I'd like to retire early. I've been maxing my 403(b) and now I'm hoping to max an HSA and IRA. I'm trying to avoid lifestyle creep as well.

 

[Charcoales]

I max 401k, max hsa, max Roth, while dumping anything over my emergency fund (~5-7k) into student loans