Health Savings Accounts, which are different and more flexible —ironically— than Flexible Spending Accounts.
In order to open a Health Savings Account, first you must open A High Deductible Health Plan or “HDHP.” That’s a specific type of health insurance plan created by Congress. For 2017, a High Deductible Health Plan must have a deductible of at least $1300 for individuals and $2600 for families. The deductible is the amount you have to pay before the insurance benefits kick in.
High Deductible Health Plans by themselves are not that exciting. But Health Savings Accounts ARE because they can help you save money. Health Savings Accounts, or HSAs, are accounts in which you can save money for healthcare costs tax free.
They’re similar to a Flexible Spending Account —only better. In the old, obnoxious Flexible Spending Accounts you have to guess how much you will spend on healthcare each year and set aside that amount. If you guess wrong, and don’t spend all the money, you forfeit the balance of your account. Oops! You lose! And little known fact: your EMPLOYER gets to keep the cash.
By contrast, the new Health Savings Accounts are so much saner. Here’s why I like them:
- HSAs roll over from year to year instead of being forfeited.
- They are portable, so you can take them with you to another job.
- Employers typically contribute to them.
- HSAs earn interest or can be invested (carefully!) in the market
- And You can cash in your HSA for any use after age 65
HSAs paired with High Deductible Health Plans are better for people who are physically and financially healthy, so that they’re either unlikely to have to pay the high deductible at all, or it won’t hurt them financially if they do. Some employers offer HSAs, many of the health plans on the Obamacare exchanges are combos of High Deductible Health Plans and Health Savings Accounts and independent insurance agents also sell them.
An HSA saves you money because it reduces your taxable income. For 2017, individuals are allowed to sock away up to $3,400 in a health savings account and families can save up to $6,750. How much can you save? Let’s say you make $100,000 a year and contribute the family maximum to an HSA. That will save you $1,688 on your taxes!
Let’s talk about how to save big on hotel rooms —luxury hotel rooms. Consumers’ Checkbook, which studies services, has scrutinized online
travel booking services and says it has figured out THE strategy for scoring rock bottom rates on 4 and 5 star hotel rooms. The answer?
Priceline. But NOT using it the regular way. Checkbook’s editors spent years experimenting and Executive Editor Kevin Brasler is here to reveal their “system.”
OK, I’m going to name the step and you explain why it’s important, alright.
Number 1: Go to Priceline’s “Name your own price” tool.
With Priceline’s “Name Your Own Price” option, you don’t know which hotel you’re bidding on. Instead, you enter the city where you will be traveling and the dates for which you will need a hotel room plus the neighborhood you prefer and the star level. The system then tells you whether your bid was accepted and which hotel accepted it. It’s less expensive because you don’t get a choice.
Next you click the bubbles to only look at 4 and 5-star hotels. Why is that important?
If your price is accepted by any hotel that meets the conditions you set, that’s where you’re booked. Because you don’t get to choose, Priceline bidding works best if you bid only on four- or five-star hotels—so you can be reasonably sure of ending up at a nice place.
Third, step: Study the different neighborhoods in your destination city, called “geographic zones,” and choose your favorite one that DOES have 4 and 5 star hotels available. Why?
In order for our strategy to work, your preferred zone has to contain Priceline four- or five-star hotel options. Deselect all other zones, select only your preferred zone.
Fourth, Make an opening bid of $60 for any 4 and 5 star hotels in that neighborhood. Why $60?
We found that’s about the lowest rate Priceline will accept for high end hotel rooms. Ignore the warnings that your bid is probably too low and wait to see if it’s accepted. Sometimes it is.
If your bid isn’t accepted you go to step 5 and this is the REAL beauty of your system: you raise your bid. But Priceline doesn’t usually let you try again for 24 hours. How do you get around that?
Priceline DOES let you try again if you add another geographic zone to your search. But — and this is key– you add a zone that does NOT have any 4 or 5 star hotels. Then you increase your bid by $5. Since your search is still limited to only 4 and 5 star hotels, Priceline will search your original target destination again, not the added destination!
And the final step is?
You repeat the process as long as you need to. Each time you bid, request your preferred zone and a different combinations of secondary zones that do NOT have 4 or 5 star hotels. Then add another $5. In this way, $5 at a time, you will identify the very lowest rate you can get for a room.
How many tries does it usually take?
We find that we usually have to rebid only two or three times to obtain a great price from Priceline.
Does this ALWAYS work?
Almost always, but In some scenarios, Priceline’s “Name Your Own Price” won’t generate lower rates than other sites. For events such as the Super Bowl, the NCAA Final Four, New Orleans’ Jazz Festival, and other times when hotels expect to be almost completely booked, you’re very unlikely to find a deal on Priceline. But it’s still worth a shot.
These are Priceline’s own star ratings. Do you find them reliable? You might disagree with Priceline’s hotel-rating system. For example,
Priceline gives three or four stars to Crowne Plaza properties; in our experience, that often seems a bit generous. Since you can’t exclude specific hotels from the Priceline bidding process, you might get stuck in a hotel for which a four-star rating is a stretch. If you’re truly worried about that, you could use our method and just search for 5-star properties.
Give me some examples of the savings Checkbook has been able to snag.
Boston: Hyatt Regency Boston Normal: $169 Checkbook: $99 New York Roosevelt Hotel Normal: $159 Checkbook: $88 Minneapolis Radisson Plaza Normal: $188 Checkbook: $98 Orlando Marriott World Resort Normal: $194 Checkbook: $97
Checkbook’s Priceline method is a lot to absorb, especially if you’re driving or jogging as you listen to Easy Money, so Checkbook has provided a guest blog post to walk you through its Strategy in detail. Be sure to check it out at EasyMoneyShow.com/12.