Why You Should Treat Your HSA Like an IRA

March 27, 2025

Would you raid your Roth IRA or 401(k) to pay for car repair bills? I suppose if you have no other choice, you might. But ordinarily, we want to use our tax-advantaged retirement accounts only as a last resort because we want that money to grow tax-free or tax-deferred for as long as possible. The HSA is the only account that allows us to make pre-tax contributions and withdraw them tax-free. Why then are we so willing to tap into our HSAs for medical expenses? Continue reading “Why You Should Treat Your HSA Like an IRA”

What to Expect When You’re Expecting

January 09, 2017

When I found out I was pregnant with my daughter, I thought a lot about what I needed to do to have a healthy pregnancy and birth. I didn’t consider how much it was going to cost. I had a healthy pregnancy, but during the last few days before labor, I developed high blood pressure, so I had to have extra monitoring for both me and the baby. My daughter was a breech baby, which we knew, and I ended up with an emergency C-section after nearly two days of unsuccessful labor in the hospital birthing room. My daughter was born healthy and I recovered quickly.

Luckily for us, I had excellent coverage from my HMO, so our out-of-pocket costs were minimal. However, for most families with low risk pregnancies, their costs could be in the thousands, especially if they have a high deductible health care plan. If a woman were uninsured and had a situation similar to mine, the cost could be $10,000 to $70,000, depending on where she lived and where she gave birth.

If you are thinking about getting pregnant or are already expecting, you’ll need to take care of your financial business in addition to your health. Even if you are insured, you are likely to have significant out-of-pocket costs for pre-natal care, labor and birth, and care for your new baby.  Step one is to contact your health insurance provider to see what’s covered:

Am I covered and how?

  • Will my insurance cover my pregnancy?
  • What kind of care does my insurance cover? What coverage is fully paid, and what costs should I expect?
  • What is the most I could pay out-of-pocket?
  • Does my health care provider offer a healthy pregnancy program and birthing classes? How can I participate?

What if I need more than the basics?

  • What happens if there are problems during the pregnancy which require special care?
  • Do I need preauthorization for any prenatal care procedures? What is the process for getting authorization?
  • How will I know in advance how much I will pay for a specific medical test or procedure?
  • What is the coverage if there are complications during birth?

What to expect for my hospital stay?

  • Do I need preauthorization for my hospital stay during birth? What is the process for getting authorization?
  • What if the hospital bills for a provider who does not participate in my health insurance without my knowledge (e.g., physician, lab, etc.)?
  • Do I have choices of where/how I can deliver my baby?
  • How many days can I stay in the hospital following the birth? What if I need a cesarean birth?

Is my baby covered?

  • Will my baby be covered right away under my health insurance? Are my baby’s costs covered if he/she has to stay in the hospital longer than me?
  • How can I add my child to my policy when he/she is born? Is there a time window (e.g. 30 or 60 days)?
  • Does my insurance cover any breastfeeding coaching and supplies?

While not everyone can plan in advance for the costs of pregnancy and birth, if you have the opportunity, estimate your out-of-pocket costs up front and build cash reserves to meet them. Even if your pregnancy is a surprise, you still have nine months to get prepared financially. That way, you will be able to focus on the joys of parenting and not the stress of unexpected medical bills when your baby arrives.

 

Do you have a question you’d like answered on the blog? Please email me at [email protected]. You can follow me on the blog by signing up here, and on Twitter @cynthiameyer_FF.

 

What to Do When You’re Expecting

July 19, 2016

When my husband and I got married, we wanted children, but we had to face the reality that it would be difficult to have children due to prior medical issues. Apparently, God had a different plan for us and I found myself surprisingly pregnant within two weeks of trying. We were happy with the news but after the joy wore off, I started putting on my planner hat to figure out how to plan financially for the new baby. I’ve always believed in learning from other people’s experience, so I started asking friends of mine who were parents what financial guidance they would give to a woman pregnant with her first baby, knowing what they know now.  The list started pouring out:

1. There are enough surprises to being a new mom without medical bills being one of them. Contact your healthcare provider to find out how you are covered for medical visits, including vaginal and c-section deliveries and well-baby care. Once you have the numbers, consider increasing your contributions into a health savings account (HSA)  or a flexible spending account (FSA) to cover the costs with pre-tax money.

2. You only get one time to be a first-time mom so take all of the leave offered to you. Contact your employer to clarify how much time you can take off and how much you will get paid during the time off. Many companies offer paternity leave so find out the rules for the baby’s father as well. If the leave is unpaid, figure out how much time you want – factoring in that you may want to take leave before the baby comes and/or your bundle of joy may be late (mine was almost two weeks pat due) into your numbers.

3. What is your ideal maternity leave? Do you have lots of friends and family to help out or do you need to outsource? If you are the primary cook of the family, do you need to budget an eating out, food delivery or frozen food budget? Do you want a nanny or baby nurse to help you out? Would you like a cleaning service to help you for the first few weeks?

Start thinking about what costs are involved in each of these options. Delivered prepared meals can run over $300 for two a day. A baby nurse could cost upwards of $200 a day. Average cost of maid services can run upwards of $157 for the service. If your budget is tight, consider asking for frozen meals or even for people to pitch in and pay for a cleaning service as part of your baby shower gift or reach out to your local place of worship for help.

4. Once you have your numbers, start to work on a budget for when you are on maternity leave as well as a budget for when you return to work.  Account for possible medical costs, any gaps between your pay before maternity leave, and the costs that come with a new baby – endless diapers, wipes and if needed, formula. After you go back to work, you’ll also have possibly new work clothes (it took me forever to fit back into my pre-baby clothes), daycare (for a year, I called my daughter my little mortgage payment) and additional doctor visits. Any parent with kids can tell you that with the first baby, as soon as they sneeze, you are crying and heading to the doctor. With baby number #2, as long as they aren’t spitting up blood, you don’t even bother.

5. If your budget shows a shortfall, take the total amount needed and divide it by the months you have left and that is your savings goal. Start thinking about what you can cut back on now to save the funds. Can you reduce your cable and cell phone bills and eat out less? Can you use vacation days to get additional paid time off?

What did I learn from all this? Overall, the best guidance centered around thinking through what your ideal maternity looks like, putting those ideas into tangible dollars and realistically assessing your finances to see if it is doable. Taking these few steps will make your first few months with your bundle of joy less financially stressful.

 

 

The Other Pain After a Medical Emergency

February 16, 2016

My husband has been battling to keep his diabetes under control for the last few years. But no matter how diligent he may be, he still may find himself in the hospital. As we started talking about a recent hospital visit, he started sharing with me the financial lessons learned over the last few years. Continue reading “The Other Pain After a Medical Emergency”

How to Reduce Out-of-Pocket Health Care Costs

April 02, 2015

Are you paying more for out-of-pocket health care costs? If so, you’re not alone. There’s a growing trend to higher deductibles for health insurance policies, which means we’re increasingly having to pay at least $1-2k out-of-pocket before the insurance kicks in. Here are some ways to reduce those costs: Continue reading “How to Reduce Out-of-Pocket Health Care Costs”

5 Ways to Impact Your Healthcare Expenses

February 17, 2014

Although the Affordable Care Act may not have immediately impacted your healthcare expenses, the insurance landscape is still uncertain and providers may eventually increase rates for coverage. Even if your expenses are already low, it’s still a good idea to try and decrease what you pay for healthcare in order to offset any potential price hikes that may be around the corner. Here’s a look at five ways to keep your medical costs low this year. Continue reading “5 Ways to Impact Your Healthcare Expenses”

Things to Consider if You Were Offered an Early Retirement Incentive Package

September 02, 2011

Over the last month, most of my working hours have been spent talking to people about the reality of deciding, in a short time window, if they are going to retire in the next several months.  Why?  These people have all been offered an early retirement incentive package with a deadline for accepting or rejecting the offer.  This meant that, for them, retirement was no longer something that was “out there in the future.”  It became a “right here, right now” opportunity.  There were things I learned during that process, and over the next 2 weeks I’ll talk about the “universal” factors.  Each person had their own story, their own situation, and their own set of circumstances that was remarkably different than anyone else’s.  But, there were some factors that were important to every single person I met.  They all asked about several factors that would impact the rest of their lives.  Here are the first few factors (more to come next week): Continue reading “Things to Consider if You Were Offered an Early Retirement Incentive Package”

OK, I’m Officially Depressed

July 08, 2011

Wow.  I don’t think I want to read financial news stories for a while now.  This is one of those times I wish I were older.  What am I talking about?  This article talks about how many Baby Boomers and Gen X’ers are “at risk” where retirement income is concerned.  The numbers get worse with each successive younger generation, and with each passing year.  Here are some numbers (I know, who comes to a financial blog to see numbers…). Continue reading “OK, I’m Officially Depressed”