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Started By
Message
HSA vs. Traditional Health Insurance Plans
Posted on 11/12/13 at 2:13 pm
Posted on 11/12/13 at 2:13 pm
First off, sorry for the novel, but I couldn't see how to shorten it before posting as I want to provide enough information to get some solid feedback from you all.
My company is going through open enrollment now, and I am seeking advice from you all about what you would do if you were in my situation.
My situation - 29 years old, married, and have a 2 month old son, all of whom will be covered under my plan. Wife does not work and will be part time if she does ever go back to work, so no penalty from the President there. I work for a Fortune 500 company with insurance through Cigna.
I've always went with the traditional plan in the past and been relatively satisfied with coverage. However, in response to Obamacare, my company has jacked up the rates and now has me questioning which plan I should enroll in. It's going to cost me $4900 in payroll contributions under the traditional plan, but only $2250 under the HSA option. My employer also contributes $750 each year to the HSA plan, but it has a $3K deductible to meet before the plan pays benefits which I believe are then paid out at 80/20 by them.
I am in good health and go to the doctor maybe 2 times per year, and my wife is also in pretty good health though she has issues come up slightly more frequently. Everything with my kid seems great so far - he's happy and healthy through 2 months of his short life. We do not plan on having another child until 2015 at the very earliest, which was the greatest cost for insurance in 2013.
Would you continue with the traditional plan or enroll in the HSA if you were in my shoes? I guess I'm also looking for pros and cons to each as information from my employer and Cigna seem sort of ambiguous on the HSA option.
Thanks in advance.
My company is going through open enrollment now, and I am seeking advice from you all about what you would do if you were in my situation.
My situation - 29 years old, married, and have a 2 month old son, all of whom will be covered under my plan. Wife does not work and will be part time if she does ever go back to work, so no penalty from the President there. I work for a Fortune 500 company with insurance through Cigna.
I've always went with the traditional plan in the past and been relatively satisfied with coverage. However, in response to Obamacare, my company has jacked up the rates and now has me questioning which plan I should enroll in. It's going to cost me $4900 in payroll contributions under the traditional plan, but only $2250 under the HSA option. My employer also contributes $750 each year to the HSA plan, but it has a $3K deductible to meet before the plan pays benefits which I believe are then paid out at 80/20 by them.
I am in good health and go to the doctor maybe 2 times per year, and my wife is also in pretty good health though she has issues come up slightly more frequently. Everything with my kid seems great so far - he's happy and healthy through 2 months of his short life. We do not plan on having another child until 2015 at the very earliest, which was the greatest cost for insurance in 2013.
Would you continue with the traditional plan or enroll in the HSA if you were in my shoes? I guess I'm also looking for pros and cons to each as information from my employer and Cigna seem sort of ambiguous on the HSA option.
Thanks in advance.
7
Posted on 11/12/13 at 2:26 pm to Shenanigans
If you aren't going to dr much the high ded plan looks better. Even if you pay the whole deductible you are running about even with the other plan. I'm sure the other plan has extra costs such as company's and all which aren't cheap these days either and add up quickly.
Posted on 11/12/13 at 2:59 pm to Shenanigans
I know our prescriptions are high with the higher deductible.
As a family of four we are rarely sick so we only visit doctor for physicals.
As a family of four we are rarely sick so we only visit doctor for physicals.
Posted on 11/12/13 at 3:00 pm to tracytiger
And my husband likes the tax deduction for HSA.
Posted on 11/12/13 at 4:19 pm to Shenanigans
Thanks for the help. I'm leaning to the HSA option now. Any situations you can think of where the lower deductible plan would make more sense?
Posted on 11/12/13 at 5:20 pm to Shenanigans
The lower deductible might work in your favor if you plan to reach your deductible year after year
It also saves you from having to pony up your entire deductible if something major happens towards the beginning of the annual cycle
Even if you did do the traditional plan, would you still qualify for the HSA, even if the company doesn't contribute at all? The pretax benefits are worth it IMO.
If you go the route of the HDHP, be sure to contribute enough to it to pay all your anticipated costs, it will save you on tax the same way.
Eta:
Someone chime in if I'm wrong on anything, I'm far from an expert on insurance
It also saves you from having to pony up your entire deductible if something major happens towards the beginning of the annual cycle
Even if you did do the traditional plan, would you still qualify for the HSA, even if the company doesn't contribute at all? The pretax benefits are worth it IMO.
If you go the route of the HDHP, be sure to contribute enough to it to pay all your anticipated costs, it will save you on tax the same way.
Eta:
Someone chime in if I'm wrong on anything, I'm far from an expert on insurance
This post was edited on 11/12/13 at 5:22 pm
Posted on 11/12/13 at 6:58 pm to Shenanigans
I have an HSA/HDHP and it's worked well for me. Without knowing all the numbers and plan details you have I can't help much, but if you do go this route I suggest contributing as heavily as you can, even if it means skimping on your IRA.
Why? Because the HSA functions much like an IRA that lets you withdraw early for medical reasons. It isn't exactly the same and if those differences matter then so be it. But just like a regular IRA, once you hit retirement age you can withdraw from it under the same rules.
Why? Because the HSA functions much like an IRA that lets you withdraw early for medical reasons. It isn't exactly the same and if those differences matter then so be it. But just like a regular IRA, once you hit retirement age you can withdraw from it under the same rules.
Posted on 11/12/13 at 8:26 pm to foshizzle
We have a HDHP/HSA ... it's worked very well for us. Only twice have we met our ded, 1 year being this year. We have a family of 5 and it's an individual policy through BCBS.
We actually put it on paper and with no illnesses or diagnoses to speak of, it was WAY better for us to go with the HDHP ...
We put into the HSA yearly the max amount so we're comfortable having that to pay anything "big" that goes toward the ded or coinsurance once met (20%).
We DO NOT pull from the HSA unless it's big things ... braces, surgery (husband had this earlier this year), MRI (I've had 3 this year), and if 3 of us end up needing glasses/contacts all at the same time. We don't pull out for MD visits or prescriptions. Even 2 of the MRIs I didn't pull out from HSA as we were only responsible for 20% ... I've got the $100 x2.
We actually put it on paper and with no illnesses or diagnoses to speak of, it was WAY better for us to go with the HDHP ...
We put into the HSA yearly the max amount so we're comfortable having that to pay anything "big" that goes toward the ded or coinsurance once met (20%).
We DO NOT pull from the HSA unless it's big things ... braces, surgery (husband had this earlier this year), MRI (I've had 3 this year), and if 3 of us end up needing glasses/contacts all at the same time. We don't pull out for MD visits or prescriptions. Even 2 of the MRIs I didn't pull out from HSA as we were only responsible for 20% ... I've got the $100 x2.
Posted on 11/12/13 at 11:51 pm to tiger91
how do you document the HSA expenditures are eligible so they aren't subject to penalty and tax?
do you purchase said goods and send a receipt to the benefits provider for reimbursement?
do you purchase said goods and send a receipt to the benefits provider for reimbursement?
Posted on 11/13/13 at 6:12 am to Dooshay
My HSA is with a bank and they give me checks and a debit card
Posted on 11/13/13 at 9:13 am to Dooshay
quote:
how do you document the HSA expenditures are eligible so they aren't subject to penalty and tax?
do you purchase said goods and send a receipt to the benefits provider for reimbursement?
I may be wrong, but I think you're good to use it for whatever it is you need medically. If there are issues, I'm sure someone will come looking.
I know for my HSA there are guidelines as what qualifies for certain tiers, medical expenses, etc..
Kinda like taxes, you're good until they decide to audit you.
Again, I'm not heavily experienced with the use of an HSA.
Posted on 11/13/13 at 10:57 am to Dooshay
Dooshay I have kept EOBs from my insurance ... some I have copies of the bills to match and some I don't but I figure the MD office can always pull it.
I've never been asked for any proof. I actually just pay for the big things with a check from the HSA.
I've never been asked for any proof. I actually just pay for the big things with a check from the HSA.
Posted on 11/13/13 at 10:58 am to tiger91
Also there was one that we just kept track of what we paid and then wrote ourselves one check at some point in the year to pay ourselves back. Had my checks to the MDs to prove those expenses.
Posted on 11/13/13 at 2:45 pm to tiger91
quote:
Also there was one that we just kept track of what we paid and then wrote ourselves one check at some point in the year to pay ourselves back. Had my checks to the MDs to prove those expenses.
So it is allowable for an individual to pay for medical expenses out of pocket them reimburse themselves for those expenses out of the HSA?
Posted on 11/13/13 at 3:15 pm to dcrews
Absolutely. I pay for my wife/kid's policy out of my checking account then reimburse out of my HSA. Been doing it for years with no issue.
Posted on 11/14/13 at 8:36 am to Loomis
quote:I pay for it w/ a rewards credit card, get the points, and have my HSA write me a check.
I pay for my wife/kid's policy out of my checking account then reimburse out of my HSA. Been doing it for years with no issue.
Posted on 11/14/13 at 9:07 am to dcrews
quote:
So it is allowable for an individual to pay for medical expenses out of pocket them reimburse themselves for those expenses out of the HSA?
As far as I was told, yes.
eta: Again, I just keep my check register/billing receipt or whatever to prove that I paid it should I ever be questioned.
This post was edited on 11/14/13 at 9:08 am
Posted on 11/14/13 at 9:49 am to tiger91
I was wondering the same thing about reimbursements. The first half of the year my likely medical expenses will outpace my HSA contributions while chipping away at the deductible so I will have to get reimbursed once my contributions catch up later in the year.
Posted on 11/14/13 at 9:54 am to Oizers
I'm just thinking back ... my agent himself told me that this is what he does. One reimbursement at the end of the year.
Posted on 11/14/13 at 12:46 pm to Shenanigans
quote:Ecolab?
I work for a Fortune 500 company with insurance through Cigna
if so
brotha ETA: FTR, I'm going with the HSA.
This post was edited on 11/14/13 at 12:49 pm
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