Author Topic: Employer Health Insurance - Aetna PPO vs. HDHP  (Read 10252 times)

Azetab

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Employer Health Insurance - Aetna PPO vs. HDHP
« on: April 08, 2014, 01:28:54 PM »
Hey guys,

First post here, and I have a question about health insurance at my employer. I just got hired at a startup and am in the process of selecting a health care plan. I've read about HDHP and PPOs and most people seem to say an HDHP is the way to go. However, my employer pays $325 in healthcare premiums to cover our base plan, the Aetna PPO 2000, which is the default plan for all employees. However, I can also choose the Aetna HDHP 2000, which is cheaper than the PPO plan, so it is covered, but I don't get money back that my employer would have otherwise had to pay if I selected the default Aetna PPO 2000. The only advantage seems to be the HSA that I can create. I'm a young adult in my early twenties, and I am generally healthy, but I do go to the doctor for annual checkups and occasional sickness, but nothing serious. I also go to the dentist semi annually and check my vision annually and plan to buy prescription eyewear on a annual basis. What would be the best plan for me?

Here are the pricing plans:

Aetna HDHP 2000 Northeast   $302.00
Aetna HMO 20 Northeast   $849.00
Aetna HMO 30 Northeast   $732.00
Aetna POS 20 Northeast   $517.00
Aetna POS 30 Northeast   $485.00
Aetna PPO 1000 Northeast   $375.00
Aetna PPO 1500 Northeast   $349.00
Aetna PPO 2000 Northeast   $325.00
Aetna PPO 750 Northeast   $420.00

Gen Y Finance Journey

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Re: Employer Health Insurance - Aetna PPO vs. HDHP
« Reply #1 on: April 08, 2014, 02:06:43 PM »
How do the two plans compare besides the premiums? What are the deductibles, out of pocket maxes, and co-pays? Also, does your employer contribute to the HSA for you if you choose the HDHP?

ZiziPB

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Re: Employer Health Insurance - Aetna PPO vs. HDHP
« Reply #2 on: April 08, 2014, 02:49:10 PM »
Another question that would also be important to answer:  what tax bracket are you in and would fully funding the HSA provide a significant tax benefit to you?  A lot of people on these boards fully fund the HSA account and basically treat it as another IRA.

Azetab

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Re: Employer Health Insurance - Aetna PPO vs. HDHP
« Reply #3 on: April 08, 2014, 09:26:24 PM »
How do the two plans compare besides the premiums? What are the deductibles, out of pocket maxes, and co-pays? Also, does your employer contribute to the HSA for you if you choose the HDHP?

                      Aetna PPO 2000   Aetna HDHP 2000
Deductible      
   In-Network           $2000            $2000
   Out-of-Network   $2500            $4000
Out of Pocket Expense Max      
   In-Network           $2000            $4000
   Out-of-Network   $2500            $8000
Co-Pays      
   In-Network      
     Physician              $30            90% covered after deductible
     Specialist              $60            90% covered after deductible

My employer does not contribute anything to the HSA.

Another question that would also be important to answer:  what tax bracket are you in and would fully funding the HSA provide a significant tax benefit to you?  A lot of people on these boards fully fund the HSA account and basically treat it as another IRA.

I am in the 25% tax bracket, I'm not sure if fully funding the HSA would provide a significant tax benefit to me, how would I go about calculating this?

ZiziPB

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Re: Employer Health Insurance - Aetna PPO vs. HDHP
« Reply #4 on: April 09, 2014, 07:56:43 AM »
Quote
I am in the 25% tax bracket, I'm not sure if fully funding the HSA would provide a significant tax benefit to me, how would I go about calculating this?

As a single person, you can contribute up to $3,300 annually to your HSA account.  The contributions reduce your taxable income for purposes of all taxes (federal, state and FICA) and if you use the funds in the HSA for payment of qualified expenses (basically anything medical related, including dental, eyeglasses, contacts, etc.) the money comes out tax free.  The funds in the HSA automatically roll over from year to year and can be used for qualified expenses at any time.  After 65, you can withdraw funds from HSA for any reason, without a penalty, but subject to income tax (same as a traditional IRA).

I max my HSA as the tax savings alone are well worth it for me.  I have my HSA through Fidelity and can invest money I have in the HSA account without any restrictions. 

rescuedog

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Re: Employer Health Insurance - Aetna PPO vs. HDHP
« Reply #5 on: April 09, 2014, 12:56:43 PM »
I'd go with the HDHP because you can open an HSA - a tripled tax differed account.  No other accounts are triple tax deferred.  Previous poster outlined the benefits of an HSA nicely.

HDHP wins if you don't use the doctor a lot (some is OK) and in catastrophic events.

We each have an individual HSA and when we use the ER or doc, we just just our savings leaving the HSA alone.  I even have a few Rx I have to pay at full price, but it is workth it for us.

Plus on our HDHP all preventative visits (hearing, eye, gyno, etc) are free (no copay).  See if yours offers anything of any sort.  Dental is a whole separate thing with our employer, unrelated to HDHP.