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- Thread starter Mtowncyclone13
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HSA premiums are just like other premiums, they're the cost. You have to put money into the HSA separate from that. But it's a savings account you get to keep forever until you've used it up.
Your premiums are to cover your high deductible health insurance plan. You then put money into your HSA as pre-tax contributions. The HSA and insurance plan work as a pair, but they are separate things.
The idea is that the premiums for your high deductible insurance are less than a full coverage plan and you use that savings to fund your HSA.
The idea is that the premiums for your high deductible insurance are less than a full coverage plan and you use that savings to fund your HSA.
Go with the regular plan in that situation. There is a potential to save $800 over the year if you never go to the doctor, but it's about a $125 minimum every time you need to see a doctor for even a minor illness. I guess the copay on the regular plan may be an important piece of info as well.
I typically prefer HSA / high deductible, but those options for premiums aren't as different as you'd normally see.
I feel like these numbers have to be off...or the max out of pocket on the first would have to be outrageous.
Also without more information you can't really compare. Co-pays, max out of pocket, etc.
Normally HSA premiums are much cheaper than other medical plans. So if you are correct and premiums are $500 per month then what would you pay for other plans? But you are correct that the premiums are "lost."
As others mentioned, you pay the premium and then whatever amount you select as your election should go into your HSA account along with anything your company might donate towards your HSA.
Last job I had was $800 deductible with $1600 OOP max. Premiums were $300/month for a family. These plans exist but they are rare. They only exist when a company really prioritizes healthcare as part of the comp plan.
Current job is HSA only. $5200 deductible plus $10k OOPMax. Premiums are $300/month as well.
Well, premiums for you were $300 per month. There was a subsidy paid by your employer to get those rates. But yes, the sibsidized health plans can be a very large benefit that often goes unnoticed by employees until it's not there.
I loved the HSA when it was an option and still haven't used it all 6 years later (past employer had a 400% match up to a total combined contribution that equaled the high deductible). But I took a new job almost entirely for the healthcare - no premiums for family PPO, $500 per person deductible, $500/year company contribution to FSA. Really miss the HSA, but if the lower deductible plan has manageable (or no) premiums and there are major health expenses on the horizon (in my case, having a kid), getting out of the high deductible plan is a no brainer.
Does that high deductible plan include any contributions to the HSA on your behalf? If so, you would need to deduct that from the $6200 to make the premium comparison fair.
Opinion: High deductible plans should have lower premiums. You are only paying for the unlikely event of a major health catastrophe happening to you or your family. You pick up the cost of the little stuff (or most of it anyway). For someone that is young and healthy, it seems like HSA should cost less than half the cost of a comprehensive plan.
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HSA is a Health Savings Account, which is optional and has no premiums, it is what you choose to put in it. It works in conjunction with a HDHP or High Deductible Health Plan. The HDHP should be what the premiums go to. HSA is basically a savings account to help you offset the possible deductible. It can roll over from year to year if not used but can only be used for Health Care Costs. At retirement it can be rolled into and IRA with no penalty ( retirement age).
So your choice in my opinion would depend on how much you go to the doctor.
If you take the money saved in premiums from the "regular" plan and add in the company contribution you'll be saving $2,700 per year in your HSA and not out any money compared with if you had just the regular plan.
It can only be used for health expenses but doesn’t go away.
I think you may be confusing the premium with a HSA. The premium gets paid out of the HSA.
I think Jnecker just did a better job explaining it. The bottom line is the premiums are taken from your check no matter which plan you are on. Beyond that, you can elect an amount to contribute to your HSA account and as you mentioned your company also contributes.
The 511 is for a high deductible plan that comes out of your HSA. The company is placing 1200 in it for you. So you would have to put 411 each month in there. I would recommend putting the premium cost for the other plan in there and let it build. If you spend 3000 or more out of pocket you want to go non HSA. If you spend less than 3000 out of pocket then go with the HSA.
Stop calling it an "HSA premium" - there is no such thing. You keep confusing two separate things, as others have already pointed out.
You pay monthly premiums pre-tax for a High-Deductible Health care Plan (HDHP). You then optionally contribute pre-tax dollars into a Health Savings Account (HSA) that you own & manage, to be used to pay for qualified health care expenses like doctor visits, prescriptions, etc. subject to deductible / co-pays / OOP max limits.
Sounds like a good question to ask your HR person then come back and tell us what they say.
Maybe I'm not understanding what you are saying but this is all wrong. The premium comes out of your paycheck just like any health insurance plan. All the money you put in the HSA account can be used for out of pocket medical expenses. You can only put $7200 per year in the HSA (assuming family and under 55), if the $6100 premium came out of that it would hardly be worth it.
Does the High Deductible plan (the one that allows you to have an HSA) cover routine exams? A physical for you, obgyn and mammograms for the Mrs. Vaccinations for kids? Flu shots?
High deductible plans often still cover that stuff. But if you.... oh, idk ... say run a chainsaw into your leg while felling a tree. No that won't be paid for. You pay the full cost of that little mistake up to your deductible. Although you will still get provider savings from your insurance company negotiating with the health provider. The regular plan will also make you pay for all this up until your deductible, but you hit it that much quicker.
Now suppose you need to see a family doc because your arthritis is acting up, or you come home from downtown Des Moines with a new STD (it's been known to happen). Your regular plan might have a co pay for routine visits like this. The High Deductible plan will make you pay everything up until the deductible. But again, you still get provider savings.
From an engineering standpoint, you can analyze 2 extremes and a middle ground
Extreme 1: little to no spending on health care. You don't own a chain saw, you are not prone to accidents, and you can resist impulsive behavior when visiting downtown Des Moines ==> High deductible plan wins on lower premiums and HSA tax advantages.
Extreme 2: You get a major disease or have a lot of bad luck and rack up tens of thousands in medical bills. ==> really a wash. You are out $7000 in med bills both ways. The premium differences and tax advantages will pale in comparison to your incredible misfortune.
Middle ground: chainsaws, arthritis and chronic STDs to the tune of $5000 per year or so in medical bills ==> this is where the regular plan can win out.
If you do go with the high deductible plan + HSA, then get your HSA setup somewhere that allows you to control the investments. HSAs held at banks that pay zilch for interest really lose their appeal IMO.
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