Reply to Employer only offering high-deductible HSA in the future

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[quote=Anonymous]pp summarized it pretty well conceptually.

in real terms, unless someone has a chronic condition, you're probably better off with the high-deductible plan and the HSA, assuming well-child visits would still be covered.

think about it this way:

Say you're currently paying around $6,000 a year in premiums for family coverage. If you switch to a high deductible plan, say the premiums are reduced to $2,000. You continue paying the extra $4,000 to yourself, only you deposit that money into the HSA. You go through the year and have the normal bumps and bruises and flus, and pay out of pocket $2,000 or so in doctors bills (you may also think twice about going to the doctor for some things, like viruses -- which is how this helps save money on a macro scale). You debit your $4,000 account for that $2,000. At the end of the year you still have $2,000 in your HSA. That money rolls over into next year.

Repeat the scenario I just described, and after year two the balance of your HSA is $4,000 before you have contributed anything more.

Carry on like this for five years -- no major incidents, just routine doctor visits. The balance of your HSA is $10,000 before you've made the new year's contribution.

And then, suddenly, BOOM! One kid needs braces. Good thing you have $10,000-plus sitting in the HSA you can use to pay for them.

The DOWNSIDE is if you have a major medical expenses early in this process, in which case your out-of-pocket burden will be high. Or, if you have a chronic condition like diabetes or cancer or something. [/quote]

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