I would love to have Bogleheads review my insurance numbers and poke holes if possible. We are expecting a baby in 2019(you are the first to know!). I know there have been a few posts about health insurance recently which I have reviewed.
Based off of our numbers I am seeing the following options and costs. I am including HSA tax savings @ 24.65% or $1,479 (12% marginal federal savings + 5% state tax + 7.65% payroll tax savings) for maxing our HSA contribution net of the employer contribution. FSA tax savings are calculated with the same rate.
2 adults (assuming 1 adult hits OOP max)
- HSA Plan #1 costs ~$3,481 ($4,000 OOP [individual]+ $1,960 premiums - $1,000 HSA contribution from employer - $1,479 tax savings)
- PPO Plan #2 costs ~$5,086 ($2,500 OOP [individual] + $3,202 premiums - $616 [FSA tax savings @ $2,500 FSA])
2 adults + baby (family hits OOP max)
- HSA Plan #1 costs ~$8,282 ($8,000 OOP [family]+ $2,761 premiums - $1,000 HSA contribution from employer - $1,479 tax savings)
- PPO Plan #2 costs ~$8,279 ($5,000 OOP + $4,512 premiums - $1233 [FSA tax savings @ $5,000 FSA])
I think it is safe to say that the expected average OOP expense is as follows (the average of both scenarios):
We will lose half of my partner's income once the baby is born. This will not change our marginal tax rate.
The above health insurance calculations mean that we should clearly go with the HSA unless I missed something? We initially chose the PPO option based on some back of napkin math but after writing this post I will switch our insurance back to the HSA..