evaluating job offer - health plans

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mollymillions
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evaluating job offer - health plans

Post by mollymillions »

Hi all.

I recently interviewed for a new job. The interview went well and I anticipate an employment offer within the next few days.

I requested benefits information so that I can properly compare overall compensation packages. Other than healthcare plans the benefit packages are comparable.

There are two health plans available, but unfortunately, neither are very good. This might just be perspective due to the high quality of my current plan.

The difference is so significant, that I calculated that I would need a 10% salary increase just to break even, with the better of the two new plan options. This is only factoring in increased premiums and a minimal contribution to an HSA account.

The deductible in the new plan is much higher, however, a potentially more significant issue with the new plan is that the coverage for all "non-preventive" care is only 80%, as opposed to the 100% my current plan provides. I have some permanent health issues that require rather expensive treatment, that are currently covered at 100%.

Also, my current health plan includes dental coverage with no additional premium. I would probably forgo dental coverage with the new plan, and just pay out of pocket (using FSA/HSA) for any dental care.

I am trying to figure out a good way to estimate my potential increase in medical expenditures. My goal would be to contribute enough to the HSA to cover most expenses, and I would like a rough estimate of what I'll be paying so that I will be ready to compare once the offer comes in. I will probably call the provider for the new plan and ask specific questions, but does anyone have any other tips, suggestions, or insight?

Thanks in advance!

Relevant demographic info:
I am 32 years old, married, with 2-year-old daughter. Re: "non-preventive" care - I have an autoimmune disease which requires a "Tier 4" medication to control, and a permanent psychiatric condition that requires ongoing treatment. My child has an allergy that requires periodic testing and issuance of new epi pens.

Here is a chart comparing the plans (the potential new plans are labelled "high" and "low"):
Image
LeeMKE
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Re: evaluating job offer - health plans

Post by LeeMKE »

You are correct in evaluating the health insurance offered.

In your case, I would use the maximum out of pocket (family) and then add the additional costs for Rx. If they can't improve your circumstance, I'd have to see other offsetting benefits to consider the new employer.

I'm with you, scared of a 20% copay once the deductible has been paid. I imagine a cancer diagnosis, with treatment topping $800,000 before the person dies, the the last standing spouse has to pay $160,000 to be finished. It is not unusual for cancer treatment to top $1,250,000.

I'm good with paying a large deductible. I don't buy more insurance than I need. BUT I always try to get $0 copay after the deductible is paid, and won't take on more than 10% copay after deductible.
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ResearchMed
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Re: evaluating job offer - health plans

Post by ResearchMed »

LeeMKE wrote:You are correct in evaluating the health insurance offered.

In your case, I would use the maximum out of pocket (family) and then add the additional costs for Rx. If they can't improve your circumstance, I'd have to see other offsetting benefits to consider the new employer.

I'm with you, scared of a 20% copay once the deductible has been paid. I imagine a cancer diagnosis, with treatment topping $800,000 before the person dies, the the last standing spouse has to pay $160,000 to be finished. It is not unusual for cancer treatment to top $1,250,000.

I'm good with paying a large deductible. I don't buy more insurance than I need. BUT I always try to get $0 copay after the deductible is paid, and won't take on more than 10% copay after deductible.
Wouldn't this be capped by the "out of pocket" maximum payments?
Doesn't the co-pay end at that total each year?

RM
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sawhorse
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Re: evaluating job offer - health plans

Post by sawhorse »

As someone with expensive medical problems, I can relate to your difficult decision. A few questions:

1. How do the networks compare? Do both networks have an equally wide list of providers? Do your current physicians participate?

2. What, if any, out of network coverage is there?

3. What specific procedures, treatments, etc are covered? If you need a certain treatment or a certain service, will they cover it? Do they offer any coverage at all for the medications your family needs? This is particularly important because deductibles, co-pays, out of pocket maximums, etc are meaningless if they don't cover it at all.

4. How do prescriptions enter into the deductible and out of pocket maximum? I've had health plans with separate prescription deductibles and some with a single deductible.

5. Are your current medications generic? For the non-generic ones, do you know the cost without insurance?

6. What counts toward the co-pay and out of pocket maximum? I had one plan where office co-pays did not count toward the deductible. For this plan, office visits were flat rate co-pay, so I think it would be less likely for a percentage co-pay.
Topic Author
mollymillions
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Re: evaluating job offer - health plans

Post by mollymillions »

Sawhorse - thanks for the input! Answers in red:
sawhorse wrote:As someone with expensive medical problems, I can relate to your difficult decision. A few questions:

1. How do the networks compare? Do both networks have an equally wide list of providers? Do your current physicians participate?
The networks are the same. Network participation is quite common locally, and my current physicians do participate.

2. What, if any, out of network coverage is there?
There is (poor) out of network coverage, but I haven't included it, because the networks are pretty extensive and so far I've been able to keep in-network for most issues.

3. What specific procedures, treatments, etc are covered? If you need a certain treatment or a certain service, will they cover it? Do they offer any coverage at all for the medications your family needs? This is particularly important because deductibles, co-pays, out of pocket maximums, etc are meaningless if they don't cover it at all.
I'm trying to figure out how to ascertain this. The only way to figure this out that I can think of is to call the health plan provider and discuss. Do you think they will answer specific questions like these, without me being currently enrolled in the plan?

4. How do prescriptions enter into the deductible and out of pocket maximum? I've had health plans with separate prescription deductibles and some with a single deductible.
The prescriptions are included in the overall medical deductible.

5. Are your current medications generic? For the non-generic ones, do you know the cost without insurance?
The primary medication that I am currently on does not have a generic. The billed cost for the medication is $13,000 per dose, which is administered quarterly. I have no idea what the cost would be for me to get it without insurance. My current health plan lists it as a "tier 4" drug, which is listed in the documentation as having "no coverage". When I was originally put on the medication, I had to fill out paperwork to get "pre-approved" for an exception for it, which seems to have been granted as a matter of course, and it is currently covered at 100%.

6. What counts toward the co-pay and out of pocket maximum? I had one plan where office co-pays did not count toward the deductible. For this plan, office visits were flat rate co-pay, so I think it would be less likely for a percentage co-pay.
In the new plan, it seems that essentially everything (aside from premiums) counts towards the deductible.
ResearchMed wrote:
LeeMKE wrote:You are correct in evaluating the health insurance offered.

In your case, I would use the maximum out of pocket (family) and then add the additional costs for Rx. If they can't improve your circumstance, I'd have to see other offsetting benefits to consider the new employer.

I'm with you, scared of a 20% copay once the deductible has been paid. I imagine a cancer diagnosis, with treatment topping $800,000 before the person dies, the the last standing spouse has to pay $160,000 to be finished. It is not unusual for cancer treatment to top $1,250,000.

I'm good with paying a large deductible. I don't buy more insurance than I need. BUT I always try to get $0 copay after the deductible is paid, and won't take on more than 10% copay after deductible.
Wouldn't this be capped by the "out of pocket" maximum payments?
Doesn't the co-pay end at that total each year?

RM
This is my understanding as well, RM.
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midareff
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Re: evaluating job offer - health plans

Post by midareff »

I'd think the maximum out of pocket difference of $11,600 would be a good starting number plus a WAG for the difference in prescription costs. Throw something in for dental as an extraction with implant and crown can run $5 to $7K by itself.

You also have to think about potential diminishment of current plan benefits... possible?
Rupert
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Re: evaluating job offer - health plans

Post by Rupert »

Not sure if this will affect you but I'm throwing it out in case it does . . . If the expensive medication you are on for your autoimmune disease is a biologic, you should know that the Affordable Care Act paved the way for the development of generic biologic drugs. Generic versions of some of them should be available in 2016 or 2017, I think. The generics will still be expensive compared to non-biologic drugs because of the way biologics are manufactured, but every little bit helps.
Topic Author
mollymillions
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Re: evaluating job offer - health plans

Post by mollymillions »

Rupert wrote:Not sure if this will affect you but I'm throwing it out in case it does . . . If the expensive medication you are on for your autoimmune disease is a biologic, you should know that the Affordable Care Act paved the way for the development of generic biologic drugs. Generic versions of some of them should be available in 2016 or 2017, I think. The generics will still be expensive compared to non-biologic drugs because of the way biologics are manufactured, but every little bit helps.
Yep, it's a biologic. I'm hoping for generics to be available sometime within the next 2-3 years, but that won't help me for a while.

midareff wrote:I'd think the maximum out of pocket difference of $11,600 would be a good starting number plus a WAG for the difference in prescription costs. Throw something in for dental as an extraction with implant and crown can run $5 to $7K by itself.

You also have to think about potential diminishment of current plan benefits... possible?
Makes sense re: the out of pocket difference+prescrip+dental. I'm not familiar with "WAG", what is that?

By "diminshment of current plan benefits" I assume you mean that I should consider the potential of my current plan getting worse over the coming years. This is an excellent point and I'm glad you mentioned it - though I'm not sure how to ascertain the likelihood of that occurring, or how to factor it in any way. :(
sawhorse
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Re: evaluating job offer - health plans

Post by sawhorse »

In response to your question about how to find out if certain treatments are covered: Can you get a copy of the plan booklet that lists the benefits? If you have a large employer, it might even be on the employer website. If it's a standard plan offered by the insurance company that isn't customized for specific employers, it might be on the insurance company website.
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midareff
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Re: evaluating job offer - health plans

Post by midareff »

Makes sense re: the out of pocket difference+prescrip+dental. I'm not familiar with "WAG", what is that?


see PM
Topic Author
mollymillions
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Re: evaluating job offer - health plans

Post by mollymillions »

sawhorse wrote:In response to your question about how to find out if certain treatments are covered: Can you get a copy of the plan booklet that lists the benefits? If you have a large employer, it might even be on the employer website. If it's a standard plan offered by the insurance company that isn't customized for specific employers, it might be on the insurance company website.
I have the booklet, yes. I also looked up the drug classification tables for the new drug plan provider.

The issue is that the medication I am taking is classed as a "Tier 4" which is designated "not covered", so it requires pre-approval from insurance before I can start taking it. No idea what the criteria are for deciding if an exception will be granted or not. The classification was the same under my current plan, but they seem to have essentially rubber-stamped it for 100% coverage after my physician filed the pre-approval paperwork. I have no idea if that will happen in the new situation - coverage could potentially be 100% or 0% (of the $52000/year medication cost....), and I'm not even sure if there's a way for me to find out.

Not sure if it means anything, but the health plan is administered by the same company as my current health plan, but drug benefits are through a different provider (current plan has health and drug coverage under the same provider).
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ResearchMed
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Re: evaluating job offer - health plans

Post by ResearchMed »

mollymillions wrote:
sawhorse wrote:In response to your question about how to find out if certain treatments are covered: Can you get a copy of the plan booklet that lists the benefits? If you have a large employer, it might even be on the employer website. If it's a standard plan offered by the insurance company that isn't customized for specific employers, it might be on the insurance company website.
I have the booklet, yes. I also looked up the drug classification tables for the new drug plan provider.

The issue is that the medication I am taking is classed as a "Tier 4" which is designated "not covered", so it requires pre-approval from insurance before I can start taking it. No idea what the criteria are for deciding if an exception will be granted or not. The classification was the same under my current plan, but they seem to have essentially rubber-stamped it for 100% coverage after my physician filed the pre-approval paperwork. I have no idea if that will happen in the new situation - coverage could potentially be 100% or 0% (of the $52000/year medication cost....), and I'm not even sure if there's a way for me to find out.

Not sure if it means anything, but the health plan is administered by the same company as my current health plan, but drug benefits are through a different provider (current plan has health and drug coverage under the same provider).
One thing to keep in mind - and unfortunately, you wouldn't know in advance - is that IF the med is "not covered" despite the same physician pre-approval paperwork, you can probably appeal.

One thing we found useful in the appeal process is if one can show what the potential cost to the insurer would be if the condition got worse/wasn't treated properly, etc.

This could be hospital days, surgery costs, etc. Some of that might be well known, some of might be "maybe".

In some cases, an appeal could be approved if it didn't "save money for the insurer", but was a serious quality of life (or even potentially worse) concern.

It's just something to think about in the future, if you find yourself in a situation where the pre-approval is declined.
The fact that it was already approved is encouraging, vs. a med that "no insurer ever approved", etc.
Obviously, the new insurer would make its own decisions, but it's still encouraging.

RM
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campy2010
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Re: evaluating job offer - health plans

Post by campy2010 »

If only one deductible and one OOP maximum are listed then both the medical and pharmacy costs should count toward that deductible and OOP maximum. If you choose the high plan and continue with similar medical and pharmacy utilization then you will be paying $2600 (deductible) +$6,000 (OOP max) = $8600 plus the bi-weekly premium ($218*26). Some benefit plans count the deductible toward the OOP max, so if that is the case, the story could be a bit better. In total, you will be paying $14,268 each year if you max out the plan benefits, which is something to seriously consider when evaluating the salary offered by the new employer.

The max you can put in the HSA in 2015 is $6500 for families and $3350 for singles. There is no harm to maxing out a HSA because the contributions carry forward and can be used in the future.

Coverage of the Tier 4 drug is tricky. You may want to have a discussion with your future manager or HR contact. Perhaps, s/he might be willing to inquire with the health plan on your behalf.
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mollymillions
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Re: evaluating job offer - health plans

Post by mollymillions »

campy2010 wrote:If only one deductible and one OOP maximum are listed then both the medical and pharmacy costs should count toward that deductible and OOP maximum. If you choose the high plan and continue with similar medical and pharmacy utilization then you will be paying $2600 (deductible) +$6,000 (OOP max) = $8600 plus the bi-weekly premium ($218*26). Some benefit plans count the deductible toward the OOP max, so if that is the case, the story could be a bit better. In total, you will be paying $14,268 each year if you max out the plan benefits, which is something to seriously consider when evaluating the salary offered by the new employer.

The max you can put in the HSA in 2015 is $6500 for families and $3350 for singles. There is no harm to maxing out a HSA because the contributions carry forward and can be used in the future.

Coverage of the Tier 4 drug is tricky. You may want to have a discussion with your future manager or HR contact. Perhaps, s/he might be willing to inquire with the health plan on your behalf.

How does the OOP maximum work with the deductible...? I'm a little confused as to how an OOP functions.

As I understand it, all covered services are covered at 80%, once the deductible is met. After meeting the deductible, the patient would be responsible for paying 20% of covered costs. Once the patient reaches the OOP maximum (by paying 20% of covered services as time goes on) the OOP maximum would then come into effect limiting further expenditures. Is this correct or am I confused?

Here's what the plan documentation says:
Annual Deductible
$2,600 Family

Annual Out-of-Pocket Maximum (includes deductible, coinsurance and copayments)
$6,000 Family
Plan pays 100% after this amount is satisfied.
BW1985
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Re: evaluating job offer - health plans

Post by BW1985 »

Then it sounds like your OOP maximum would include the money you paid for the deductible. Good news.
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mollymillions
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Re: evaluating job offer - health plans

Post by mollymillions »

So, some good news!

It looks like i'll be okay with the tier 4 drug - if coverage exception is not approved for some reason (based on my calling around today, it should be) there are multiple "copay assistance" plans provided by the drug manufacturer that essentially pay the medication cost for me (out of the kindest of their hearts! *WINK*).

Other good news - even though coverage is at 80% as opposed to 100%, there is no flat copay, so for most covered services it seems i'll actually be paying less.

So, long story short, it appears total outlay will be more than currently due to the higher deductible and premiums (and no dental plan!), but not dramatically so.


Thanks everyone for your kind help, I greatly appreciate it!!!


Edit: one other quick question - I've never used an HSA before. It seems from my reading, that I should contribute up to max in the HSA before I start putting anything into the FSA - is this correct or am I way off base?
campy2010
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Re: evaluating job offer - health plans

Post by campy2010 »

mollymillions wrote:So, some good news!

It looks like i'll be okay with the tier 4 drug - if coverage exception is not approved for some reason (based on my calling around today, it should be) there are multiple "copay assistance" plans provided by the drug manufacturer that essentially pay the medication cost for me (out of the kindest of their hearts! *WINK*).

Other good news - even though coverage is at 80% as opposed to 100%, there is no flat copay, so for most covered services it seems i'll actually be paying less.

So, long story short, it appears total outlay will be more than currently due to the higher deductible and premiums (and no dental plan!), but not dramatically so.


Thanks everyone for your kind help, I greatly appreciate it!!!


Edit: one other quick question - I've never used an HSA before. It seems from my reading, that I should contribute up to max in the HSA before I start putting anything into the FSA - is this correct or am I way off base?
You cannot contribute to an FSA if you contribute to an HSA. It is one or the other.

Not sure I agree that your conclusion that your expenses won't be dramatically higher. With your high medical and pharmacy utilization you will likely be hitting the OOP max every year so you'll ultimately be paying more than double what you had been paying previously. At least to me, that is a substantial increase.

Old plan = $157*26 + $400 (OOP max) + $600 (deductible) = $5,082 [assuming the deductible is separate from the OOP max]

New plan = $212*26 + $6,000 = $11,512 [deductible contributes to the OOP max]
Topic Author
mollymillions
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Re: evaluating job offer - health plans

Post by mollymillions »

campy2010 wrote:
mollymillions wrote:So, some good news!

It looks like i'll be okay with the tier 4 drug - if coverage exception is not approved for some reason (based on my calling around today, it should be) there are multiple "copay assistance" plans provided by the drug manufacturer that essentially pay the medication cost for me (out of the kindest of their hearts! *WINK*).

Other good news - even though coverage is at 80% as opposed to 100%, there is no flat copay, so for most covered services it seems i'll actually be paying less.

So, long story short, it appears total outlay will be more than currently due to the higher deductible and premiums (and no dental plan!), but not dramatically so.


Thanks everyone for your kind help, I greatly appreciate it!!!


Edit: one other quick question - I've never used an HSA before. It seems from my reading, that I should contribute up to max in the HSA before I start putting anything into the FSA - is this correct or am I way off base?
You cannot contribute to an FSA if you contribute to an HSA. It is one or the other.

Not sure I agree that your conclusion that your expenses won't be dramatically higher. With your high medical and pharmacy utilization you will likely be hitting the OOP max every year so you'll ultimately be paying more than double what you had been paying previously. At least to me, that is a substantial increase.

Old plan = $157*26 + $400 (OOP max) + $600 (deductible) = $5,082 [assuming the deductible is separate from the OOP max]

New plan = $212*26 + $6,000 = $11,512 [deductible contributes to the OOP max]
re: HSA/FSA - gotcha, thanks. That makes more sense. :)

The additional cost is definitely significant. I did receive the offer today, and the added healthcare costs will eat up close to half of the offered salary increase. However, I don't anticipate finding a better job offer anytime soon, and I don't want to let this one issue block my career forever. I have some thinking to do, so we'll see how it goes.
2tall4economy
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Re: evaluating job offer - health plans

Post by 2tall4economy »

I. Can't add anything specific to your situation but your high and low plan are very normal in the fortune 500 world. The high plan is more or less an exact Match to my employer.
This will be the new normal if it's not already.

Hsa and high deductible caps to the rescue.
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Topic Author
mollymillions
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Re: evaluating job offer - health plans

Post by mollymillions »

2tall4economy wrote:I. Can't add anything specific to your situation but your high and low plan are very normal in the fortune 500 world. The high plan is more or less an exact Match to my employer.
This will be the new normal if it's not already.

Hsa and high deductible caps to the rescue.
Yeah that agrees with what I've found in researching the last few days. I have reason to suspect my current company will be changing to this model at some point in the not-too-distant future also.
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