Health insurance w/employer - Traditional versus HDHP HSA

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Post Reply
LiarsDice
Posts: 3
Joined: Fri Apr 20, 2018 3:13 pm

Health insurance w/employer - Traditional versus HDHP HSA

Post by LiarsDice » Sat Nov 10, 2018 6:49 pm

It's open enrollment time with my wife's employer and they're rolling out a new plan for next year so I've spent some time comparing and every scenario still points to changing plans being worthwhile. We're a family of 4 - us in our 30's and kids 4 and 2 years old. Our 4 year old does have some further allergy testing and possibly needing OIT done to desensitize. Wife wants to get blood work done in the coming months. My assumptions are that we'll max the deductible but that even so, it's worthwhile. Other than this, we're all healthy.

Current plan:
  • WHA HMO 30
    Premium - $932/yr
    Deductible - $1,500/$2,500
    Copay - $30-$100
    Max OOP - $2,500
HDHP with HSA:
  • Employer deposits $1,800 into HSA
    Premium - $910/yr
    Deductible $1800/$3600
    Max OOP - $7,200, but from what I've found it's only for prescription costs once the $3.6k deduc is met
Assumptions:
  • Max out the HSA ~ $7,000
    Max out and meet family deductible at $3,600
    $22% tax bracket with savings of $1,540
    Pay OOP and don't touch HSA (healthequity has an option for vanguard funds)
Both plans use the same WHA network, same doctors so no need to change anything. When I tinkered with the HSA calculator I added in several improbable visits, surgeries, specialists etc and what I found was still a savings from going the HDHP route. Based on the above assumptions I have the HDHP option with a net $1,230 cost versus $1,782 for the traditional plan we're on with $30 copay. If we don't hit the $3.6k cap, well, that's just more savings and naturally would lean towards the HDHP anyways.

I guess it just feels counter-intuitive that it's STILL the best option despite having high medical expense assumptions which is why I'm here. I'd greatly appreciate if the kind folks here could share their thoughts.

StopIroningShirts
Posts: 26
Joined: Sat Nov 10, 2018 7:20 pm
Location: Texas
Contact:

Re: Health insurance w/employer - Traditional versus HDHP HSA

Post by StopIroningShirts » Sat Nov 10, 2018 7:57 pm

That's a *very* generous HDHP including a company contribution. Consider hugging your employer.

I think the math is meant to be neutral to you in this offering and then its your choice of how you want to pay for heatlhcare.

If you're going to build the HSA account and save receipts, do that. I've also enjoyed all the reward points we've accrued, its partially offset the pain of being a high consumer of healthcare as of late.

LiarsDice
Posts: 3
Joined: Fri Apr 20, 2018 3:13 pm

Re: Health insurance w/employer - Traditional versus HDHP HSA

Post by LiarsDice » Sat Nov 10, 2018 9:02 pm

You bring up a really good point that kind of brings it together. In the enrollment notice they mention that their goal is to cover at least 75% of full time employee health insurance regardless of the plan so from that perspective I think they're trying to make them equal options.

My interest in the HSA as a triple tax benefit has me eager to pull the trigger but I needed to be sure I'm not missing something since my wife isn't as excited about the HSA and can't see past the paying out of pocket part. :mrgreen:

I do remember my wife telling me about an email chain she was a part of that in essence explained that after having an independent consultant evaluate all areas for cutting costs they determined having another option (HDHP) would save the hospital money. Maybe it's a matter of less work on their part to manage it or that they're hanging an extra few carrots to incentivize people to switch plans?

Our plan would be to save every receipt and stash them away in the event we needed to pull money out earlier than anticipated, which hopefully never happens.

blevine
Posts: 2051
Joined: Sat Feb 27, 2010 3:57 pm
Location: New York

Re: Health insurance w/employer - Traditional versus HDHP HSA

Post by blevine » Sat Nov 10, 2018 10:36 pm

Always avoided HSA due to simplifaction argument (avoid another account and more receipts to save).

But what got me was my preference to pay the insurance company as little as possible, and have that cash so I can make my own decisions on care. If I want to go out of network, I will. If I want a specific treatment or drug, up to me. I look at insurance as help for catastrophic losses, and in case if medical insurance, a 3rd party to negotiate prices at least for part of my care (in-network covered expenses).

Believe it or not, I once had United Healthcare tell me they would no longer cover a generic drug, we HAD to use the name brand. Kinda backwards from what you would think (and what had annoyingly happened in the past). I will use the HSA $ to do whatever I and my chosen doctor feel is correct.

LiarsDice
Posts: 3
Joined: Fri Apr 20, 2018 3:13 pm

Re: Health insurance w/employer - Traditional versus HDHP HSA

Post by LiarsDice » Sun Nov 11, 2018 5:53 pm

I remember reading somewhere of someone who would pay the cash price and get them to knock some of the cost down as well. Not sure how repeatable that is but just another point about it putting you more in control of your own health care.

Post Reply