Healthcare Decision

[WhoDey]

Alright it is that time of year for healthcare selection and the first year post baby.

The baby just turned 1 my wife and I are in our early 30s and healthy.  We only go to the doctor for annual checkups/baby checkups.

I enrolled in option 1 for 2016 and currently have $1,000 in my company funded HRA.  If I were to stay in option 1 or 2 I would receive another $1,000.  I also fund our FSA up to $500 as this is the amount I am able to roll over to the next year.

My company offers 3 plans (Low Deductible/Medium Deductible/High Deductible).  HSA is only applicable to the High Deductible.  My company also provides $1,000 in an HRA for options 1 & 2.  Unused amounts roll to the next year - no cap.  Once I reach 65 I get to keep the funds I have in the HRA.  If I switch plans from option 1 or 2 at any time before 65 I forfeit any amount in the HRA.

Upon my review of the 3 plans there are no differences in coverage - only in premium/deductible/Out of Pocket Maximum

Plan 1 (Low Deductible)
Annual Premium: $3,775
Deductible: $2,500
OOP Max: $6,000

Plan 2 (Medium Deductible)
Annual Premium: $2,864
Deductible: $3,750
OOP Max: $8,250

Plan 3 (High Deductible)
Annual Premium: $927
Deductible: $5,000
OOP Max: $10,500

*In accordance with requirements under the Affordable Care Act (ACA), no individual family member can pay more out-of-pocket in 2017 than $7,150 (Options 1 & 2) or $6,550 (Option 3), or the combined family out-of-pocket maximum for the plan option in which they are enrolled, whichever is less. Once the combined family out-of-pocket maximum is met, the plan will pay 100% of eligible expenses for the remainder of the year (including for a family member who has not met the individual out-of-pocket maximum).

I am torn between which option to select.  If I forego selecting option 1 or 2 I forfeit the 1,000 currently in the account as well as the 1,000 I would received for next year (Jan 1, 2017), but the premiums are huge.  The deductibles suck for each option if you ask me, just need to pick my poison I guess.
 

[Heroes821]

I won't speak to which plan is better because I am studying such things myself and not confident in my answers, BUT. Why are you not capping that HSA? With a family plan that's $6750 pre-tax every year (probably $6800 in 2017). It follows you forever and is tax exempt when used on medical purchases. My personal plan with the HSA is to not touch it at all for my healthy years and pay out of pocket for anything that comes up until I'm in my 60s when the HSA should be massive and able to help you pay medical bills for the remainder of your life.

[Proud Foot]

I am not sure how the 500 in your FSA would work with the HSA for carry-over.  Even if you were to lose it by choosing the HSA, your total combined loss from 2016 would only be $1,500.  And this is less than the amount you would be saving in reduced premiums.  Then add in the tax savings from being able to max out the HSA and not have to worry about losing any unused amount.

I have never had the chance to enroll in an HSA plan but I have always heard that a HSA plan is the best if you have really low health costs or really high health costs.  From your description it sounds like you have low health costs.

[WhoDey]

I have not maxed the hsa because it is not available for option 1 or 2

[MDM]

The 'HDHP Analysis' tab in the case study spreadsheet might be useful.

E.g., if I understand correctly your HDHP vs. Option 2 would be


In other words, if you have $0 medical expenses it costs you $2864 - $1000 = $1864 for option 2, and $927 for the HDHP.  The costs go up dollar for dollar until you hit the Option 2 deductible, etc.

[Heroes821]

I have not maxed the hsa because it is not available for option 1 or 2

Ah I was thinking if you have an HSA you were already on a plan that was HD. I'm all about capping the HSA while young and healthy as long as you don't have pre-existing conditions that generate thousands in medical bills per year.