.

[throwittoblythe]

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.

Yeah, and it was definitely a point of negotiation with my new company. The $10k OOPMax was the really surprising part to me. I knew $1600 was low but didn’t expect the OOPMax to be so high. Thankfully we’re done having kids but if one of them breaks a limb, it’s gonna suck.

 

[throwittoblythe]

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.

Yeah that sounds nice. In very simple terms, I always viewed the HSA as good for people with no prescriptions and infrequent dr visits. The traditional plans are good for those who need medial services regularly. Unfortunately my company only offers HSA.

When HSAs first became a thing, we didn’t sign up because we thought we’d be having kids soon. It took several years to accomplish that. So, all my friends who signed up for HSA were getting lasik because they had so much stockpiled from not using it.

I view HSA like home insurance. I have to personally pay for maintenance stuff (change a light, unclog the sink) but the insurance covers catastrophic events.

 

[BCClone]

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.

Being wrong and not being the best decision is two different things and it also comes down to the situation. I go back to when I actively used mine since I’m self employed. I now route everything through a flex plan since I incorporated about ten years ago and it saves me much more.

 

[cyfan21]

Yeah, and it was definitely a point of negotiation with my new company. The $10k OOPMax was the really surprising part to me. I knew $1600 was low but didn’t expect the OOPMax to be so high. Thankfully we’re done having kids but if one of them breaks a limb, it’s gonna suck.

You should look into Aflac or some type of accident coverage

 

[throwittoblythe]

You should look into Aflac or some type of accident coverage

Good idea. I just negotiated a higher salary to cover the difference in OOPMax. So, I have that money in my paycheck instead of in my health coverage.

 

[NebraskaCY]

When I looked at going with a high-deductible plan, I was lucky that i could look at the previous year as a probable worst case scenario for my family. We had an ER visit for one kid and multiple ear infections and maybe surgery for tubes with another.

I was able to create a spreadsheet that compared the out-of-pocket for both plans. I found that even with this situation, we would have broken even with the high deductible that year. My wife was concerned about the out of pocket, but the spreadsheet demonstrated that in most years we will be able to save money in the HSA and bank it for these worst case scenario years.

I've continued using the spreadsheet each year for verification. We've been able to save a minimum of $1600 and have averaged $2100/yr over the middle-road insurance plan.

 

[urb1]

When I looked at going with a high-deductible plan, I was lucky that i could look at the previous year as a probable worst case scenario for my family. We had an ER visit for one kid and multiple ear infections and maybe surgery for tubes with another.

I was able to create a spreadsheet that compared the out-of-pocket for both plans. I found that even with this situation, we would have broken even with the high deductible that year. My wife was concerned about the out of pocket, but the spreadsheet demonstrated that in most years we will be able to save money in the HSA and bank it for these worst case scenario years.

I've continued using the spreadsheet each year for verification. We've been able to save a minimum of $1600 and have averaged $2100/yr over the middle-road insurance plan.

Same here. As we have gotten older and things came up, we saved money using the HSA. It's hard until you meet the deductible each year, but saves money in the long run.

 

[CivEFootball]

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.

H

I'd run Example 2 and Example 3 by your HR as well because some HDHP (High Deductible Health Plans) family coverage "count" the individual deductible and max out pocket for each family member as well. Example 2 from above (and assuming family of four and you were the one injuried) looks like:

You: have cainsaw accident, individual deductibles of $2,000 then next $1,500 at coinsurance to get to $3,500 Max Individual out of pocket.
SO: routine yearly medical
Dependent 1: routine yearly medical
Dependent 2: routine yearly medical

So then your SO and dependents would be counting up to the family max out of pockect of the remaining $3500 to the $7000.

 

[NebraskaCY]

Same here. As we have gotten older and things came up, we saved money using the HSA. It's hard until you meet the deductible each year, but saves money in the long run.

My wife was concerned that it would be hard with the deductible, but you actually have the cash if you make a conscious effort to place the premium difference into the HSA. If the HSA is thru your employer, you can have the difference deducted right from your paycheck.

 

[CivEFootball]

PS. On a PPO plan co-pays don't count to max out pockets so if you have to continually go to a specialist that can add up on a PPO

 

[Cyinthenorth]

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.

Right. You can't use HSA money to pay health ins. premiums

 

[Cycloneforever42]

From reading this thread, employers need to educate their employees on the differences between HDHP + HSA and "regular" health plans.

 

[VeloClone]

My employer offers both low deductible and high deductible plans. We also get a VEBA (voluntary employees' beneficiary association) plan which is money contributed to my HRA every month. In addition there is another plan where we can voluntarily put in pretax dollars for eligible medical expenses but it is mostly a use it or lose it plan so you want to use those dollars first every year. With a kid in braces it is a no brainer to max it out.

One thing to keep in mind with an HRA is that it can also be considered a part of your retirement savings. We tend to have more medical bills and don't generally have the best insurance around after we leave employment so saving it for retirement is a good thing. You are putting away pre-tax dollars that compound and can be withdrawn tax free (for paying medical expenses) in retirement. Most dollars are either taxed on the way in or the way out.

 

[Gunnerclone]

another financial over-complication thread on CF.

 

[ricochet]

My wife was concerned that it would be hard with the deductible, but you actually have the cash if you make a conscious effort to place the premium difference into the HSA. If the HSA is thru your employer, you can have the difference deducted right from your paycheck.

This is an important point. Unless I'm mistaken, you don't pay any taxes (including FICA) on money put in as a payroll deduction. If you fund the HSA some other way you don't pay income tax but you still pay FICA. That is like a 7% gain right there unless you are over the social security cap in which case it is only like 1.5% for medicare.

 

[mywayorcyway]

This is an important point. Unless I'm mistaken, you don't pay any taxes (including FICA) on money put in as a payroll deduction. If you fund the HSA some other way you don't pay income tax but you still pay FICA. That is like a 7% gain right there unless you are over the social security cap in which case it is only like 1.5% for medicare.

That's an interesting point I had not considered. I have my HSA setup to max out my account annually via payroll deductions, but last year I had a leave of absence where I didn't get paid for two months. That leaves my HSA short of maxed. I will top it off with my own contribution, but I hadn't considered that I'm missing out on those deductions.

This is a tax accounting question, but I'm wondering if I make that post-tax contribution do I also get to reclaim the FICA cost that I paid in?

 

[DurangoCy]

So that $500/month is just...gone?

I have access to a regular plan with a $1500 deductible for $7,000/year premiums or and HSA for $6,200/year with $7,000 deductible. Thoughts?

My company covers something like 90% of the premiums, but I'm single. If you have wife/kids and they're being covered, the out of pocket sounds similar to what you're quoting, is that your situation? If you're being offered health insurance as a benefit and you're single, but your company isn't contributing to premiums, it sounds like a raw deal. If you're married with kids, it sounds close.

As others have said - check with your HR.

Premiums are the cost of insurance and are "gone" - 90% company 10% me
Then I get to contribute the $3600 (+/-) into the HSA savings account per year to invest and grow.