Anonymous
07/15/2013 06:51
Subject: Employer only offering high-deductible HSA in the future
My company switched to a high deductible plan and charged us more a lot more.
Anonymous
07/14/2013 23:33
Subject: Employer only offering high-deductible HSA in the future
My company switched to a high deductible plan. The rates were cheaper and it works really well for folks who don't go to the doctor much because their overall costs are going down. Of course, my family has a boatload of medical claims and we hit the deductible in just a couple months and during that January-March period I have to be sure to have $3000 available.
I put about $200 a month into the HSA, which smooths out the bumps somewhat. Nice to know that the money in the HSA is "mine" and doesn't go away at the end of the year or if I switch jobs.
I put about $200 a month into the HSA, which smooths out the bumps somewhat. Nice to know that the money in the HSA is "mine" and doesn't go away at the end of the year or if I switch jobs.
Anonymous
07/13/2013 15:44
Subject: Employer only offering high-deductible HSA in the future
Also consider whether it will work for your family to only use in-network doctors in FEHB plans. For example IIRC the Fed BCBS Standard plan costs more than twice as much as Basic, which was under $2500. The plans are very similar, main difference being coverage for out of network providers.
The FEHB family plan would cover you so HSA premiums for yourself are unnecessary... Whether its worthwhile depends what you get for that.
The FEHB family plan would cover you so HSA premiums for yourself are unnecessary... Whether its worthwhile depends what you get for that.
Anonymous
07/13/2013 08:15
Subject: Employer only offering high-deductible HSA in the future
Anonymous wrote:In most situations, the HSA will at worst be a wash. Even if there are chronic conditions, the amount you pay opt-of-pocket (from the HSA) will be offset by the premium reduction. You should construct three scenarios to compare to the Fed Plan - worst-case scenario, middle of the road, and best-case scenario. Be sure to account for the deductible, copays, and out of pocket maximums when you to the comparisons.
OP here -- thank you for this suggestion.
Anonymous
07/13/2013 08:11
Subject: Re:Employer only offering high-deductible HSA in the future
Would it make sense to enroll in an HSA if spouse already has a good non-HSA plan for the family. I could sign on for the HSA for myself or family, pay low premiums, and plan to use it as a savings vehicle. The plan would be primary for me, but I'm healthy right now and secondary for family.
Anonymous
07/12/2013 10:41
Subject: Employer only offering high-deductible HSA in the future
Anonymous wrote: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.
I regard the HSA as funding the deductibles and copays etc. You can also use the HSA for dental, orthodontia, vision, prescriptions, etc. If the coveage after the deductible is comparable and the OP's premium savings are comparable to the deductible then it's a wash. Except for the HSA and items that OP might not have any coverage for like orthodontia. That means the HSA tax benefit is the advantage.
http://www.irs.gov/taxtopics/tc502.html
Another interesting tax topic is theft and casualty losses. Think tree damage - big limitations based on income. Lower income gets a deduction others no.
Anonymous
07/12/2013 10:38
Subject: Employer only offering high-deductible HSA in the future
In most situations, the HSA will at worst be a wash. Even if there are chronic conditions, the amount you pay opt-of-pocket (from the HSA) will be offset by the premium reduction. You should construct three scenarios to compare to the Fed Plan - worst-case scenario, middle of the road, and best-case scenario. Be sure to account for the deductible, copays, and out of pocket maximums when you to the comparisons.
Anonymous
07/12/2013 10:32
Subject: Employer only offering high-deductible HSA in the future
Thanks, 10:26. I appreciate you noting the negotiated rates for services, prescriptions, etc. So when I went to a doctor for a physical (as an example) I would still have an insurance card (group #/policy #) but would also have some sort of HSA debit card to cover a co-pay (if required)?
Anonymous
07/12/2013 10:30
Subject: Employer only offering high-deductible HSA in the future
As a PP stated, HSAs are great if you have rather predictable expenses, and have money already set aside in case of emergencies (before your HSA builds up). Make sure you have that extra money though!
Anonymous
07/12/2013 10:26
Subject: Employer only offering high-deductible HSA in the future
As PP said, if your family is generally healthy, you will do better under the HSA arrangement. If someone is sick (not talking the flu here, but in the hospital, chronic illness, etc.) you will likely pay more.
One thing to mention: under your plan, you probably don't have to pay for preventive care out of the deductible. That is likely to be covered right from the start. So don't be afraid to go get your yearly GYN visit, or to take your kids in for their annual check-ups and vaccines. You need to check the information on your plan to be sure, but it is almost certain that these services are covered 100% without having to pay the deductible.
Also, remember that your plan is still negotiating rates for your services and drugs even when you are paying the deductible. It isn't as though you are totally on your own until then. So if you need a prescription, for example, in January, you are still getting the discounted price that your insurance plan has negotiated for it. A lot of people misunderstand that and think they'll pay obscene prices.
One thing to mention: under your plan, you probably don't have to pay for preventive care out of the deductible. That is likely to be covered right from the start. So don't be afraid to go get your yearly GYN visit, or to take your kids in for their annual check-ups and vaccines. You need to check the information on your plan to be sure, but it is almost certain that these services are covered 100% without having to pay the deductible.
Also, remember that your plan is still negotiating rates for your services and drugs even when you are paying the deductible. It isn't as though you are totally on your own until then. So if you need a prescription, for example, in January, you are still getting the discounted price that your insurance plan has negotiated for it. A lot of people misunderstand that and think they'll pay obscene prices.
Anonymous
07/12/2013 10:25
Subject: Employer only offering high-deductible HSA in the future
Thanks for laying out the over-the-years example, 10:19.
One of my kids is SN and sees a therapist (in-network) weekly. For the chronic conditions scenario that you mentioned, would I still be ok with the HD HSA since we would be using an in-network provider?
One of my kids is SN and sees a therapist (in-network) weekly. For the chronic conditions scenario that you mentioned, would I still be ok with the HD HSA since we would be using an in-network provider?
Anonymous
07/12/2013 10:22
Subject: Employer only offering high-deductible HSA in the future
Thanks for your reply, 10:12. Do you have any suggestions on how I could run the numbers to compare the HD HSA to an FEHB plan? Should I just use last year's medical expenses (EOBs) and run through both options?
The family deductible is $6K in-network and $12K out-of-network, with a $6K out-of-network max for co-insurance. The total premium (employer and my part combined) is about $1K less per month compared to the United HealthCare PPO, so I understand why the decision was made. Still concerns me if something serious was to happen.
The family deductible is $6K in-network and $12K out-of-network, with a $6K out-of-network max for co-insurance. The total premium (employer and my part combined) is about $1K less per month compared to the United HealthCare PPO, so I understand why the decision was made. Still concerns me if something serious was to happen.
Anonymous
07/12/2013 10:19
Subject: Employer only offering high-deductible HSA in the future
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.
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.
Anonymous
07/12/2013 10:12
Subject: Re:Employer only offering high-deductible HSA in the future
The pros are a lower monthly deductible and the opportunity to set aside money (I think $6250 for family, I have to set mine up this month) on a tax deferred basis. You are not required to use the HSA for your health expenses and no loss of unused funds so you can let it continue to grow on a tax deferred basis, which is what we plan to do.
Cons are high deductibles (ours is $5200) which means you are paying most of your expenses out of pocket. Of course if you use the HSA funds you can offset that. I think they come with cards that make it easy to use the HSA funds.
We have found that the lower premium offsets the high deductible so we're better off with the arrangement. But it would depend a lot on your use of health care and how much your employer contributes to the premium.
Cons are high deductibles (ours is $5200) which means you are paying most of your expenses out of pocket. Of course if you use the HSA funds you can offset that. I think they come with cards that make it easy to use the HSA funds.
We have found that the lower premium offsets the high deductible so we're better off with the arrangement. But it would depend a lot on your use of health care and how much your employer contributes to the premium.
Anonymous
07/12/2013 10:06
Subject: Employer only offering high-deductible HSA in the future
My employer is changing the health insurance coverage for employees and will only offer a high-deductible HSA.
For those that have experience with high-deductible HSAs, what are the pros and cons for these plans?
My wife is a fed and I am considering changing our (family with 3 kids) insurance to FEHB so we do not have to do the HSA.
For those that have experience with high-deductible HSAs, what are the pros and cons for these plans?
My wife is a fed and I am considering changing our (family with 3 kids) insurance to FEHB so we do not have to do the HSA.