Fed w/ non-fed working spouse - HDHP ?

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Topic Author
FreddyC
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Joined: Mon Jul 06, 2015 7:25 pm

Fed w/ non-fed working spouse - HDHP ?

Post by FreddyC » Thu Oct 17, 2019 7:38 pm

I am hoping for some guidance and advice about optimizing our healthcare elections and personal finance situation. Thanks in advance for reading and any helpful comments. Every year when open season comes, I think about an HDHP to allow an HSA, but I ultimately keep the status quo, which I think is the optimal choice for our situation. This year, I’m hoping for feedback to let me know whether we are on the right track.

Our current situation is as follows: My spouse and our 3 small kids are covered by federal BCBS basic health insurance. My spouse’s non-fed gov employer offers $0.00/pay period premium contribution for Self coverage, so she alone has dual coverage. I am also VA eligible (but rarely go to docs and use providers within my BCBS coverage plan). We use an FSA to reduce tax liability.

I have thought about switching to GEHA HDHP for me as an individual. My wife’s employer does not seem to offer an HDHP. Her Healthcare plan would allow her and the kids (but not me) to be covered with a $141/2 week pay period premium.

Unfortunately, I’m not that savvy when it comes to healthcare, so I’m not sure what other info I should include to get the best advice. I would be in a position to contribute the max to the HSA - we are maxing our 457/TSP and Roth IRAs.
Thanks!!

Tdubs
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Re: Fed w/ non-fed working spouse - HDHP ?

Post by Tdubs » Thu Oct 17, 2019 9:06 pm

If I understand your situation correctly, I don't see where your wife's option of carrying her and the kids helps you since you have to carry single coverage for yourself in FEHB. Combined that = $217 biweekly. You can carry the entire family on FEHB in 2020 for $191.22 biweekly.

Regarding the basic plan vs. HDHP debate, there has been a recent thread on this at viewtopic.php?f=2&t=292105.

There are cases where a basic plan bests an HDHP, but generally the HDHP wins because of the HSA component. Unfortunately, there are a lot of nuances to the plans that make it hard to compare them.

If your agency has access to Checkbook, you can run your own scenario and will see that the GEHA HDHP bests BCBS basic in the four cases Checkbook runs.

Topic Author
FreddyC
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Re: Fed w/ non-fed working spouse - HDHP ?

Post by FreddyC » Fri Oct 18, 2019 6:10 am

I read that thread, which is what brought this to mind again.

If I elect to go HDHP, I will either be the only eligible individual for the HSA, which means my wife’s premiums go from 0 to $141/biweekly and will cover her+children, or my wife would have to disclaim coverage and I would have to select the family plan.

Should we disclaim her free coverage or just make the partial switch (which is the only thing I outlined above) just for the benefit of an HSA? The more I read, the more that actually seems to be a decent option, but this is very much as one poster put it, a “red pill-blue pill situation” i.e. a choice most people don’t make.

motorcyclesarecool
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Re: Fed w/ non-fed working spouse - HDHP ?

Post by motorcyclesarecool » Fri Oct 18, 2019 6:21 am

There’s something I don’t understand from your posts:

Why can’t you elect family coverage on whatever FEHB HDHP for you and the kids, and she continues using her employer’s $0 option? Why couldn’t that scenario work?
Understand that choosing an HDHP is very much a "red pill" approach. Most would rather pay higher premiums for a $20 copay per visit. They will think you weird for choosing an HSA.

Topic Author
FreddyC
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Re: Fed w/ non-fed working spouse - HDHP ?

Post by FreddyC » Fri Oct 18, 2019 6:37 am

motorcyclesarecool wrote:
Fri Oct 18, 2019 6:21 am
There’s something I don’t understand from your posts:

Why can’t you elect family coverage on whatever FEHB HDHP for you and the kids, and she continues using her employer’s $0 option? Why couldn’t that scenario work?
That is an option, but the way I understand that option, my wife will not be eligible for an HSA because she is covered by a non-HDHP plan. So now my premiums are substantially more under that option and the kids are also subject to the higher deductible and the HSA contribution is still capped at approximately $3500.

As I understand it, my access to VA care is another wrinkle, since that would affect my HSA-eligibility. That’s not a dealbreaker, but it’s another think I have to be aware of.

By the way, I’m not trying to sound like I have the answers- I definitely need help and appreciate it!

motorcyclesarecool
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Re: Fed w/ non-fed working spouse - HDHP ?

Post by motorcyclesarecool » Fri Oct 18, 2019 6:55 am

According to IRS Pub. 969, if you have family HDHP coverage, you can contribute the family amount to your HSA.

https://www.irs.gov/publications/p969#e ... 1000204046

If your spouse is old enough to qualify for catch-up contributions, she would have to have her own HSA to capture that; otherwise it can all go into yours.

ONLY MAKE EXTRA CERTAIN THAT YOU’RE NOT COVERED ON YOUR SPOUSE’S FSA.
Understand that choosing an HDHP is very much a "red pill" approach. Most would rather pay higher premiums for a $20 copay per visit. They will think you weird for choosing an HSA.

Topic Author
FreddyC
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Re: Fed w/ non-fed working spouse - HDHP ?

Post by FreddyC » Fri Oct 18, 2019 7:22 am

motorcyclesarecool wrote:
Fri Oct 18, 2019 6:55 am
According to IRS Pub. 969, if you have family HDHP coverage, you can contribute the family amount to your HSA.

https://www.irs.gov/publications/p969#e ... 1000204046

If your spouse is old enough to qualify for catch-up contributions, she would have to have her own HSA to capture that; otherwise it can all go into yours.

ONLY MAKE EXTRA CERTAIN THAT YOU’RE NOT COVERED ON YOUR SPOUSE’S FSA.
Thank you for the information. It seems like primary benefit of what you propose would be the ability to capture more in the HSA. If I wanted to be slightly more risk averse with the kids’ possible costs- would the option of just self coverage so the kids don’t have a HD - which I outlined above - be a good middle ground?

gclancer
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Re: Fed w/ non-fed working spouse - HDHP ?

Post by gclancer » Fri Oct 18, 2019 8:13 am

FreddyC wrote:
Fri Oct 18, 2019 6:37 am
and the HSA contribution is still capped at approximately $3500
Double check that assumption. I know nothing about VA eligibility and HDHP/HSA but that’s definitely something you’ll want to understand before taking the plunge.

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MillennialFinance19
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Re: Fed w/ non-fed working spouse - HDHP ?

Post by MillennialFinance19 » Fri Oct 18, 2019 9:17 am

gclancer wrote:
Fri Oct 18, 2019 8:13 am
FreddyC wrote:
Fri Oct 18, 2019 6:37 am
and the HSA contribution is still capped at approximately $3500
Double check that assumption. I know nothing about VA eligibility and HDHP/HSA but that’s definitely something you’ll want to understand before taking the plunge.
It's not a question of being "eligible" for VA care, rather a question of utilizing it for non-service-connected issues. If you A) don't use the VA even though your eligible, or B) use the VA only for service-connected issues, you'll still be eligible for the HSA in full.

motorcyclesarecool
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Re: Fed w/ non-fed working spouse - HDHP ?

Post by motorcyclesarecool » Fri Oct 18, 2019 5:42 pm

FreddyC wrote:
Fri Oct 18, 2019 7:22 am
motorcyclesarecool wrote:
Fri Oct 18, 2019 6:55 am
According to IRS Pub. 969, if you have family HDHP coverage, you can contribute the family amount to your HSA.

https://www.irs.gov/publications/p969#e ... 1000204046

If your spouse is old enough to qualify for catch-up contributions, she would have to have her own HSA to capture that; otherwise it can all go into yours.

ONLY MAKE EXTRA CERTAIN THAT YOU’RE NOT COVERED ON YOUR SPOUSE’S FSA.
Thank you for the information. It seems like primary benefit of what you propose would be the ability to capture more in the HSA. If I wanted to be slightly more risk averse with the kids’ possible costs- would the option of just self coverage so the kids don’t have a HD - which I outlined above - be a good middle ground?
If you gather all your Explanations of Benefit for the past year and pop them into a spreadsheet, you should be able to map out how you would have fared last year on an HDHP. Mail Handlers and GEHA both have compelling packages. See my sig line.
Understand that choosing an HDHP is very much a "red pill" approach. Most would rather pay higher premiums for a $20 copay per visit. They will think you weird for choosing an HSA.

Tdubs
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Re: Fed w/ non-fed working spouse - HDHP ?

Post by Tdubs » Fri Oct 18, 2019 6:55 pm

motorcyclesarecool wrote:
Fri Oct 18, 2019 5:42 pm
FreddyC wrote:
Fri Oct 18, 2019 7:22 am
motorcyclesarecool wrote:
Fri Oct 18, 2019 6:55 am
According to IRS Pub. 969, if you have family HDHP coverage, you can contribute the family amount to your HSA.

https://www.irs.gov/publications/p969#e ... 1000204046

If your spouse is old enough to qualify for catch-up contributions, she would have to have her own HSA to capture that; otherwise it can all go into yours.

ONLY MAKE EXTRA CERTAIN THAT YOU’RE NOT COVERED ON YOUR SPOUSE’S FSA.
Thank you for the information. It seems like primary benefit of what you propose would be the ability to capture more in the HSA. If I wanted to be slightly more risk averse with the kids’ possible costs- would the option of just self coverage so the kids don’t have a HD - which I outlined above - be a good middle ground?
If you gather all your Explanations of Benefit for the past year and pop them into a spreadsheet, you should be able to map out how you would have fared last year on an HDHP. Mail Handlers and GEHA both have compelling packages. See my sig line.
Also look at CareFirst HDHP.

motorcyclesarecool
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Joined: Sun Dec 14, 2014 7:39 am

Re: Fed w/ non-fed working spouse - HDHP ?

Post by motorcyclesarecool » Sat Oct 19, 2019 9:28 am

Tdubs wrote:
Fri Oct 18, 2019 6:55 pm
motorcyclesarecool wrote:
Fri Oct 18, 2019 5:42 pm
FreddyC wrote:
Fri Oct 18, 2019 7:22 am
motorcyclesarecool wrote:
Fri Oct 18, 2019 6:55 am
According to IRS Pub. 969, if you have family HDHP coverage, you can contribute the family amount to your HSA.

https://www.irs.gov/publications/p969#e ... 1000204046

If your spouse is old enough to qualify for catch-up contributions, she would have to have her own HSA to capture that; otherwise it can all go into yours.

ONLY MAKE EXTRA CERTAIN THAT YOU’RE NOT COVERED ON YOUR SPOUSE’S FSA.
Thank you for the information. It seems like primary benefit of what you propose would be the ability to capture more in the HSA. If I wanted to be slightly more risk averse with the kids’ possible costs- would the option of just self coverage so the kids don’t have a HD - which I outlined above - be a good middle ground?
If you gather all your Explanations of Benefit for the past year and pop them into a spreadsheet, you should be able to map out how you would have fared last year on an HDHP. Mail Handlers and GEHA both have compelling packages. See my sig line.
Also look at CareFirst HDHP.
CareFirst is for the National Capital Region. GEHA, MHBP, and Aetna are national providers.
Understand that choosing an HDHP is very much a "red pill" approach. Most would rather pay higher premiums for a $20 copay per visit. They will think you weird for choosing an HSA.

Topic Author
FreddyC
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Joined: Mon Jul 06, 2015 7:25 pm

Re: Fed w/ non-fed working spouse - HDHP ?

Post by FreddyC » Sat Oct 19, 2019 5:22 pm

Thanks for all the help!

Does my middle ground plan of switching the kids to my wife’s plan so that the only family member with an HDHP make sense?

Tdubs
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Joined: Tue Apr 24, 2018 7:50 pm

Re: Fed w/ non-fed working spouse - HDHP ?

Post by Tdubs » Sat Oct 19, 2019 7:40 pm

FreddyC wrote:
Sat Oct 19, 2019 5:22 pm
Thanks for all the help!

Does my middle ground plan of switching the kids to my wife’s plan so that the only family member with an HDHP make sense?
You mean so that you are the only family member on the HDHP? So you would be paying a higher combined premium and only be able to contribute half as much the HSA? Without knowing more about your wife's plan, it is hard to know what is best.

fujiters
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Joined: Tue Mar 06, 2018 2:17 pm

Re: Fed w/ non-fed working spouse - HDHP ?

Post by fujiters » Sat Oct 19, 2019 11:44 pm

Tdubs wrote:
Sat Oct 19, 2019 7:40 pm
FreddyC wrote:
Sat Oct 19, 2019 5:22 pm
Thanks for all the help!

Does my middle ground plan of switching the kids to my wife’s plan so that the only family member with an HDHP make sense?
You mean so that you are the only family member on the HDHP? So you would be paying a higher combined premium and only be able to contribute half as much the HSA? Without knowing more about your wife's plan, it is hard to know what is best.
+1

I would assume you'd want to have at least one other family member on you HDHP so that you'll be able to contribute the family maximum to your HSA ($7100 in 2020), rather than the individual maximum, which is half that. A family plan also gets more put in your HSA via the premium pass through, so some of the higher premium for adding a family member to your plan is simply more money getting added to your HSA.

Get your EOBs out and run expected costs under the various options available to you. This thread on last year gives some examples of running these calculations:

viewtopic.php?t=232140
“The purpose of the margin of safety is to render the forecast unnecessary.” -Benjamin Graham

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