HDHP/HSA Family Plans and Spousal Double Coverage

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bigdoofus
Posts: 23
Joined: Mon Apr 11, 2011 6:51 pm

HDHP/HSA Family Plans and Spousal Double Coverage

Post by bigdoofus » Thu Nov 08, 2018 7:22 pm

So I've been evaluating my health insurance options for 2019 and was thinking something along the lines of this thread viewtopic.php?f=1&t=202120

I've generally covered my SO under my PPO plans since she had no health insurance through her jobs and is a relatively high user of insurance. She finally got a job recently that has a decent hybrid HMO option ($80 per pay period) with a nasty spousal coverage penalty ($80 per pay period on top of the extra cost of spousal coverage), so switching myself to her plan isn't cost effective.

Based on that and the fact I rarely use my insurance, I was planning to switch to single coverage HDHP and gain access to the HSA and my company's HSA contribution of $1k. I was just thinking (and then reading the thread above), that if I add my wife to my HSA plan for a nominal extra cost ($20 per pay period, they just eliminated the spousal penalty for 2019) making it a family plan, I would get another $1k from my company, and also have access to the higher family limit. I would do the full family contribution from my side as I know that she is ineligible to contribute because she has a non HDHP plan.

Just wanted a sanity check on this. Based on the thread above, this all seems to be above board.

oslocal
Posts: 76
Joined: Sat May 21, 2016 5:30 pm

Re: HDHP/HSA Family Plans and Spousal Double Coverage

Post by oslocal » Thu Nov 08, 2018 8:06 pm

I believe there's a requirement to provide an option for a HDHP, so she should also have that option. The math generally works out for very low users and high users that HDHP/HSA is better than PPO due to the premiums and high max OOP, and certainly if there's a in-network low maximum OOP (i.e. at $2700 as opposed to $5400 let's just say - for individuals)
If you have a high user and a low user, it's most likely best to put you on separate plans, even though your company may provide an extra $1000 for it - unless you have a small max OOP feature with your employer.

Note that you cannot contribute the family maximum unless you have individual+child and/or spouse coverage.
You can use your HSA to pay for her co-pays and deductibles under her PPO plan however if you choose to go that route.

Some clarifying questions:
Do you have kids, and if so are they healthy?
what is the effective premiums in $ amounts?

bigdoofus
Posts: 23
Joined: Mon Apr 11, 2011 6:51 pm

Re: HDHP/HSA Family Plans and Spousal Double Coverage

Post by bigdoofus » Thu Nov 08, 2018 8:23 pm

oslocal wrote:
Thu Nov 08, 2018 8:06 pm
I believe there's a requirement to provide an option for a HDHP, so she should also have that option. The math generally works out for very low users and high users that HDHP/HSA is better than PPO due to the premiums and high max OOP, and certainly if there's a in-network low maximum OOP (i.e. at $2700 as opposed to $5400 let's just say - for individuals)
If you have a high user and a low user, it's most likely best to put you on separate plans, even though your company may provide an extra $1000 for it - unless you have a small max OOP feature with your employer.

Note that you cannot contribute the family maximum unless you have individual+child and/or spouse coverage.
You can use your HSA to pay for her co-pays and deductibles under her PPO plan however if you choose to go that route.

Some clarifying questions:
Do you have kids, and if so are they healthy?
what is the effective premiums in $ amounts?
No kids yet. The idea is she would take the HMO coverage and I would do HDHP myself and spouse. I would use my HSA to pay her expenses.

HMO Premiums - $160 per month for SO, $380 for SO+myself without the spousal coverage penalty on top of that. No deductibles or coinsurance, co-pays only
HDHP 1 - $30 per month for myself, $70 for myself+SO. $1K company contribution for single, $2K company contribution for family plan, $3K OOP/deductible
HDHP 2 - $60 per month for myself, $160 for myself+SO. $1K company contribution for single, $2K company contribution for family plan, $1.5K OOP/deductible

oslocal
Posts: 76
Joined: Sat May 21, 2016 5:30 pm

Re: HDHP/HSA Family Plans and Spousal Double Coverage

Post by oslocal » Thu Nov 08, 2018 8:24 pm

As an example I can provide my situation - (one low user and one heavy user)

My employer has average employee cost levels I think (all in per year, much easier to evaluate):
HDHP: $1400 EE only, $2600 EE+spouse
Company contributes: $650 for EE only, $1300 for EE+spouse
Effective 'premium' (minimum cost): $750 EE only and $1300 EE+spouse
max oop in network (HDHP): $2700 EE only, $5400 EE+spouse
worst case all-in cost: 3350 EE only and 6700 EE+spouse

Spouse's company option, very generous with premiums:
HDHP: $0 EE only (can't recall spouse option but it's more expensive than my plan)
PPO: $0 EE only (can't recall spouse option but it's more expensive than my plan)
company contributes: $0
max oop in network: $5000 (PPO or HDHP)
worst case all in cost (which we will trigger): $5000

So our options are basically:
separate plans: best case: $5750, worst case: $8350
one plan (worst case only): $6700

Rather than trying to save the extra $950 and hoping to not lose the extra $1650, we're going on my plan for the guaranteed $6700 as it only takes a couple doctors visit to blow those $950 on a HDHP - and also removes my disincentive to go to the doctor.

oslocal
Posts: 76
Joined: Sat May 21, 2016 5:30 pm

Re: HDHP/HSA Family Plans and Spousal Double Coverage

Post by oslocal » Thu Nov 08, 2018 8:25 pm

You're not allowed to contribute to the HSA if she is covered under a health plan that is not a HDHP, so that won't work.

edit:
(this post is incorrect according to later posts.)
Last edited by oslocal on Thu Nov 08, 2018 9:01 pm, edited 1 time in total.

bigdoofus
Posts: 23
Joined: Mon Apr 11, 2011 6:51 pm

Re: HDHP/HSA Family Plans and Spousal Double Coverage

Post by bigdoofus » Thu Nov 08, 2018 8:26 pm

oslocal wrote:
Thu Nov 08, 2018 8:25 pm
You're not allowed to contribute to the HSA if she is covered under a health plan that is not a HDHP, so that won't work.
She can't contribute, but I can. The other thread has a direct quote from the IRS stating as such.
Other health coverage. You (and your spouse, if you have family coverage) generally can’t have any health coverage, other than an HDHP. However, you can still be an eligible individual even if your spouse has non-HDHP coverage provided you aren’t covered by that plan.
You can have additional insurance that provides bene- fits only for the following items.
Liabilities incurred under workers' compensation laws, tort liabilities, or liabilities related to ownership or use of property.
A specific disease or illness.
A fixed amount per day (or other period) of hospitali- zation.
You can also have coverage (whether provided through insurance or otherwise) for the following items.
Accidents. Disability. Dental care. Vision care. Long-term care

Spirit Rider
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Joined: Fri Mar 02, 2007 2:39 pm

Re: HDHP/HSA Family Plans and Spousal Double Coverage

Post by Spirit Rider » Thu Nov 08, 2018 8:40 pm

oslocal wrote:
Thu Nov 08, 2018 8:06 pm
I believe there's a requirement to provide an option for a HDHP, so she should also have that option.
This is simply not true. A company absolutely does not have to offer an HDHP.
Note that you cannot contribute the family maximum unless you have individual+child and/or spouse coverage.
You can use your HSA to pay for her co-pays and deductibles under her PPO plan however if you choose to go that route.
An HSA can be used to reimburse you, your spouse and your dependents regardless of the coverage any of you have.

Spirit Rider
Posts: 8895
Joined: Fri Mar 02, 2007 2:39 pm

Re: HDHP/HSA Family Plans and Spousal Double Coverage

Post by Spirit Rider » Thu Nov 08, 2018 8:42 pm

OP, keep in mind that if your spouse enrolls in a general purpose FSA it will make you ineligible to make HSA contributions.

bigdoofus
Posts: 23
Joined: Mon Apr 11, 2011 6:51 pm

Re: HDHP/HSA Family Plans and Spousal Double Coverage

Post by bigdoofus » Thu Nov 08, 2018 8:44 pm

Spirit Rider wrote:
Thu Nov 08, 2018 8:42 pm
OP, keep in mind that if your spouse enrolls in a general purpose FSA it will make you ineligible to make HSA contributions.
Thanks, yeah I'm aware of the FSA/HSA issue.

oslocal
Posts: 76
Joined: Sat May 21, 2016 5:30 pm

Re: HDHP/HSA Family Plans and Spousal Double Coverage

Post by oslocal » Thu Nov 08, 2018 8:54 pm

Can you actually contribute the full amount to a family HSA if one of the HDHP covered individuals is covered under a non-HDHP plan?

edit:
just read the other thread. I learn something every day! Looks like a good idea to me :beer (unless you get sick of course...)
But the downside risk doesn't look all that big anyway.

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