PPO to HSA switch - Planned Pregnancy
PPO to HSA switch - Planned Pregnancy
First and Foremost, this is my first post here after being a lurker for quite some time. While I have read a few threads on this topic, I was hoping that I could get some advice based on my specific situation.
While we are still a bit away from having to enroll in health insurance for the upcoming year, I have long contemplated whether or not to stick with my PPO (which I have been enrolled in since starting work) or move to a HSA. As the years have gone on and I have seen my parents grow older and enter retirement, I have become hyper-aware/hyper-plan focused on my own. While I would love to move away from my current PPO and move to a HSA, my wife and I (god-willing) are hoping to have a child in the upcoming year(s) and I am unsure if that is the right move or not. I see my medical costs rising significantly, which makes me think I missed the boat...
Any help would be greatly appreciated and looking forward to contributing more!
CDHP w/ HSA
Deductible | $3,000 (In-Network), $5,000 (Out-of-Network)
Out-of-Pocket | $7,000 (In-Network), $12,000 (Out-of-Network)
Co-Insurance | 90% (In-Network), 70% (Out-of-Network)
Annual Employer Contribution | $900
Doctor & Specialist Visits | 10% after deductible (In-Network), 30% after deductible (Out-of-Network)
Preventive Care | $0 (In-Network), 30% after deductible (Out-of-Network)
Urgent Services | 10% after deductible (In-Network), 30% after deductible (Out-of-Network)
Pregnancy Services, Hospital Stay | 10% after deductible (In-Network), 30% after deductible (Out-of-Network)
PPO <---- Currently Enrolled
Deductible | $900 (In-Network), $1,500 (Out-of-Network)
Out-of-Pocket | $4,900 (In-Network), $7,500 (Out-of-Network)
Co-Insurance | 90% (In-Network), 70% (Out-of-Network)
Annual Employer Contribution | N/A
Doctor & Specialist Visits | $20/Primary $35/Specialist (In-Network), 30% after deductible (Out-of-Network)
Preventive Care | $0 (In-Network), 30% after deductible (Out-of-Network)
Urgent Services | $100 co-pay 10% after deductible (In-Network), 30% after deductible (Out-of-Network)
Pregnancy Services, Hospital Stay | $250 co-pay then 10% (In-Network), 30% after deductible (Out-of-Network)
About me:
- I currently max out my traditional 401k and my wife maxes her rIRA
- Tax Bracket is 35% and I live in NYC
- Age 31 and married this year.
While we are still a bit away from having to enroll in health insurance for the upcoming year, I have long contemplated whether or not to stick with my PPO (which I have been enrolled in since starting work) or move to a HSA. As the years have gone on and I have seen my parents grow older and enter retirement, I have become hyper-aware/hyper-plan focused on my own. While I would love to move away from my current PPO and move to a HSA, my wife and I (god-willing) are hoping to have a child in the upcoming year(s) and I am unsure if that is the right move or not. I see my medical costs rising significantly, which makes me think I missed the boat...
Any help would be greatly appreciated and looking forward to contributing more!
CDHP w/ HSA
Deductible | $3,000 (In-Network), $5,000 (Out-of-Network)
Out-of-Pocket | $7,000 (In-Network), $12,000 (Out-of-Network)
Co-Insurance | 90% (In-Network), 70% (Out-of-Network)
Annual Employer Contribution | $900
Doctor & Specialist Visits | 10% after deductible (In-Network), 30% after deductible (Out-of-Network)
Preventive Care | $0 (In-Network), 30% after deductible (Out-of-Network)
Urgent Services | 10% after deductible (In-Network), 30% after deductible (Out-of-Network)
Pregnancy Services, Hospital Stay | 10% after deductible (In-Network), 30% after deductible (Out-of-Network)
PPO <---- Currently Enrolled
Deductible | $900 (In-Network), $1,500 (Out-of-Network)
Out-of-Pocket | $4,900 (In-Network), $7,500 (Out-of-Network)
Co-Insurance | 90% (In-Network), 70% (Out-of-Network)
Annual Employer Contribution | N/A
Doctor & Specialist Visits | $20/Primary $35/Specialist (In-Network), 30% after deductible (Out-of-Network)
Preventive Care | $0 (In-Network), 30% after deductible (Out-of-Network)
Urgent Services | $100 co-pay 10% after deductible (In-Network), 30% after deductible (Out-of-Network)
Pregnancy Services, Hospital Stay | $250 co-pay then 10% (In-Network), 30% after deductible (Out-of-Network)
About me:
- I currently max out my traditional 401k and my wife maxes her rIRA
- Tax Bracket is 35% and I live in NYC
- Age 31 and married this year.
Re: PPO to HSA switch - Planned Pregnancy
You left out how much each plan costs for contributions from your paycheck. I know you won’t know 2019 for the next few weeks, but 2018 is a good guide. On its face, the HSA plan looks better without knowing the cost.
Re: PPO to HSA switch - Planned Pregnancy
Also, for each plan you need to know do you have individual and family deductibles and maximums? For example with my employer the HSA/HDHP plan is only family deductible and family out of pocket max, there are no individual numbers. But the PPO is completely different there is both individual and family deductible/out of pocket max.
- Artful Dodger
- Posts: 1949
- Joined: Thu Oct 20, 2016 12:56 pm
Re: PPO to HSA switch - Planned Pregnancy
Please confirm both individual and family deductible and out of pocket for both plans. Also, is the deductible aggregate or embedded? An aggregate deductible can be met in full by one family member. Embedded deductibles are satisfied individually. So, in your example, you may have a $3000 family deductible. If aggregate, then wife alone could satisfy, so you'll pay out full $3000 before coinsurance comes into play. If you actually have a $1500 individual deductible within a family plan with $3000 family deductible, then you'll pay the first $1500 of wife's charges before coinsurance.
As BeneIRA note, please include what your contributions would be for employee/spouse and full family (E+SP+CH) coverage. PPO & HSA
As BeneIRA note, please include what your contributions would be for employee/spouse and full family (E+SP+CH) coverage. PPO & HSA
Re: PPO to HSA switch - Planned Pregnancy
Sorry all, a bit new to what I need to this all and some of the nitty gritty. Here is what it says in my plan for both:
CDHP w/ HSA
Deductible | $1,500 (Individual) $3,000 (Family)
Out-of-Pocket | $3,500 (Individual) $7,000 (Family)
Per Paycheck (Bi-Weekly) $424.38to hit HSA max (Based on the UHC Estimator)
PPO
Deductible | $300 (Individual) $900 (Family)
Out-of-Pocket | $2,300 (Individual) $4,900 (Family)
Per Paycheck (Bi-Weekly) $231
- It is also an aggregate deductible
CDHP w/ HSA
Deductible | $1,500 (Individual) $3,000 (Family)
Out-of-Pocket | $3,500 (Individual) $7,000 (Family)
Per Paycheck (Bi-Weekly) $424.38to hit HSA max (Based on the UHC Estimator)
PPO
Deductible | $300 (Individual) $900 (Family)
Out-of-Pocket | $2,300 (Individual) $4,900 (Family)
Per Paycheck (Bi-Weekly) $231
- It is also an aggregate deductible
- Artful Dodger
- Posts: 1949
- Joined: Thu Oct 20, 2016 12:56 pm
Re: PPO to HSA switch - Planned Pregnancy
Ignoring the HSA contribution for right now, what is the bi-weekly cost for the CDHP plan?
Re: PPO to HSA switch - Planned Pregnancy
Without the HSA contribution it is $159
- Artful Dodger
- Posts: 1949
- Joined: Thu Oct 20, 2016 12:56 pm
Re: PPO to HSA switch - Planned Pregnancy
For simplicity, I assumed no expense for you other than annual preventive exam covered at 100%.
Mom - $20,000 maternity
Baby $1000 first year / non-preventive charges
HSA
Mom - $3000 deductible + $1700 coinsurance = $4700
Baby - $100 coinsurance
Total - $4800
Employer Contribution to HSA - $900
Total Benefit Cost - $3900
Payroll Deduction - (26X$159) = $4134 X .65 (Sec 125 adj.) = $2687
Total cost of CDHP plan = ($3900 + $2687) = $6587
PPO
Mom - $300 deductible + $1970 coinsurance = $2270
Baby - $75 copays ($500 charges) + $300 deductible +$20 coinsurance ($500 charges) = $395
Total Benefit Cost - $2665
Payroll Deduction - (26X$231 = $6006 X .65 (Sec 125 adj.) = $3904
Total cost of PPO plan = ($2665 + $3904) = $6569
At this point, it's a wash. More charges for baby or dad will slightly tip scale in favor of CHDP/HSA plan.
Big HSA advantage - Potential additional tax savings for additional HSA contribution ($6000 * .35) = $2100
Even if you have a FSA / flex plan available, the HSA is almost always a better option (more flexible, safer, no use it or lose it worry).
Mom - $20,000 maternity
Baby $1000 first year / non-preventive charges
HSA
Mom - $3000 deductible + $1700 coinsurance = $4700
Baby - $100 coinsurance
Total - $4800
Employer Contribution to HSA - $900
Total Benefit Cost - $3900
Payroll Deduction - (26X$159) = $4134 X .65 (Sec 125 adj.) = $2687
Total cost of CDHP plan = ($3900 + $2687) = $6587
PPO
Mom - $300 deductible + $1970 coinsurance = $2270
Baby - $75 copays ($500 charges) + $300 deductible +$20 coinsurance ($500 charges) = $395
Total Benefit Cost - $2665
Payroll Deduction - (26X$231 = $6006 X .65 (Sec 125 adj.) = $3904
Total cost of PPO plan = ($2665 + $3904) = $6569
At this point, it's a wash. More charges for baby or dad will slightly tip scale in favor of CHDP/HSA plan.
Big HSA advantage - Potential additional tax savings for additional HSA contribution ($6000 * .35) = $2100
Even if you have a FSA / flex plan available, the HSA is almost always a better option (more flexible, safer, no use it or lose it worry).
- Artful Dodger
- Posts: 1949
- Joined: Thu Oct 20, 2016 12:56 pm
Re: PPO to HSA switch - Planned Pregnancy
For clarification, the Sec 125 adjustment is the pretax savings attributed to the payroll deduction. Since you said you were 35% tax bracket, I calculated your true cost at 65% of the payroll deduction for each plan.
Re: PPO to HSA switch - Planned Pregnancy
Thank you!!! I really appreciate the help!