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Message
Traditional Plan vs HSA in my scenario
Posted on 2/28/17 at 2:12 pm
Posted on 2/28/17 at 2:12 pm
I am doing a cost comparison on the cost benefits between the two and just wanted to make sure I am not leaving anything out in my thought process. From what I can save in weekly premiums, when invested into an HSA would more than cover the cost difference in deductibles between the two. I typically dont go to the doctor unless for preventive care, but have a wife and young child about to turn 1.
Traditional / HIGH DEDUCTIBLE with HSA
Premium: $136/wk / $78/wk
Deductible: $400x3 / $3000
Maximum: $3000x3 / $5000
Traditional / HIGH DEDUCTIBLE with HSA
Premium: $136/wk / $78/wk
Deductible: $400x3 / $3000
Maximum: $3000x3 / $5000
3
Posted on 2/28/17 at 2:20 pm to TigerSaint1
For me its not even about the cost savings per month as much as it is about the HSA being able to roll over year to year. That was the selling feature for me. There will be years you spend more and years you spend less.
Posted on 2/28/17 at 2:33 pm to JayDeerTay84
Completely agree which is another benefit weighed into the HSA. Just have to build up the initial funds in there to cover any big cost in the first couple years.
Posted on 2/28/17 at 2:44 pm to TigerSaint1
quote:Yeah I think you'll be fine, does your employer chip in?
Completely agree which is another benefit weighed into the HSA. Just have to build up the initial funds in there to cover any big cost in the first couple years.
I was in this same spot last year. I ended up going solo HSA with my employer since I never get sick, wife and kid stayed on her employer's plan (PPO). I built a nice head start with personal and employer contributions last year, so this year we're all on the same plan, and employer chipped in again.
Posted on 2/28/17 at 3:23 pm to castorinho
I don't believe employer chips in. When Insurance premiums started to rise, our company took a chunk of that burden and passed down very minimal cost to the employee.
Posted on 2/28/17 at 3:39 pm to TigerSaint1
HSA easily imo. What you save in premiums you can pay the increased deductible. Not sure how your other retirement savings are but you can save $3400 in the HSA BEFORE the 6.2% social security tax. $3400 contributed to HSA > $3400 to 401k in that regard. What bank is your HSA with? Some let you invest. Only drawback is you have to spend the money on healthcare but at retirement age that's probably what you'll be spending a lot on.
Posted on 2/28/17 at 4:31 pm to TrebleHook
quote:
Only drawback is you have to spend the money on healthcare but at retirement age that's probably what you'll be spending a lot on.
Allow me to sweeten the HSA pot: only healthcare can get the triple tax advantage, but after 59.5 you can withdraw from a HSA as if it is an IRA, paying standard income taxes in withdrawals. Maximize contributions to a HSA, even if you shave them from an 401k (maintaining the max match).
Because as you say, health care expenses are likely to be your highest in life. And if you are lucky and don't need it, it's a penalty free retirement fund. Win-win
Posted on 2/28/17 at 6:55 pm to TigerSaint1
Weird question...
is there a benefit to getting one of these and then NOT using it right now for medical expenses (assuming you can afford it). In other words, do you HAVE to use it? Or an I save it for the future...?
is there a benefit to getting one of these and then NOT using it right now for medical expenses (assuming you can afford it). In other words, do you HAVE to use it? Or an I save it for the future...?
Posted on 2/28/17 at 7:26 pm to AndyJ
No you don't have to use it. You can use money out of your pockets and pay yourself any time you please
Posted on 3/1/17 at 2:05 am to Volvagia
I'm also a fan of the HSA route and agree with what you're saying. But I was thinking that the earliest age to make a nonqualified withdrawal and avoid the penalty was 65.
And at 55, you can put an additional $1000/yr into the account. Ah, the benefits of getting old(er).
And at 55, you can put an additional $1000/yr into the account. Ah, the benefits of getting old(er).
Posted on 3/1/17 at 8:19 am to Jag_Warrior
HSA is quite literally the best saving vehicle in the tax code. Money is contributed before taxes, grows tax free, and is then used on healthcare tax free. It's the only place in the tax code where the government doesn't get a cut.
Posted on 3/1/17 at 9:25 am to lynxcat
Do it OP. I've been using an HSA for 7 years or more now. I have a wife and 2 kids under 4 on it now also, wife was skeptical at first but all about it now.
Preventative/ Wellness is 100% covered by all plans no matter what. My kids usually go to the doctor 1-2x a year for things outside of wellness, stuff like minor ear infection, sinus infection, bad cold, etc. Those visits cost usually about $240.
I end up way ahead with my HSA even with 2 kids.
What hurts you with an HSA is if you have a kid that needs routine doctors visits or something like a minor injury like a fracture that would be taken care of in 1-2 doctor visits for $400-500 with a PPO but will eat up your deductible with an HSA. But those are once or twice in 10 year type of occurrences so you still save a ton long term.
ETA: With 2 kids under 4, I've spent under $600 each year of the last 4 years for our family total out of my HSA outside of the births. I also saved over $2000 on each birth using an HSA due to premium and maximum out of pocket savings.
ETA2: Your wife can't be one of those that takes your kid to the doctor every time they have a runny nose. That's going to cost you $200 a pop instead of a $40 copay or whatever.
Preventative/ Wellness is 100% covered by all plans no matter what. My kids usually go to the doctor 1-2x a year for things outside of wellness, stuff like minor ear infection, sinus infection, bad cold, etc. Those visits cost usually about $240.
I end up way ahead with my HSA even with 2 kids.
What hurts you with an HSA is if you have a kid that needs routine doctors visits or something like a minor injury like a fracture that would be taken care of in 1-2 doctor visits for $400-500 with a PPO but will eat up your deductible with an HSA. But those are once or twice in 10 year type of occurrences so you still save a ton long term.
ETA: With 2 kids under 4, I've spent under $600 each year of the last 4 years for our family total out of my HSA outside of the births. I also saved over $2000 on each birth using an HSA due to premium and maximum out of pocket savings.
ETA2: Your wife can't be one of those that takes your kid to the doctor every time they have a runny nose. That's going to cost you $200 a pop instead of a $40 copay or whatever.
This post was edited on 3/1/17 at 9:29 am
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