Author Topic: the most wonderful time of the year: benefits election  (Read 3027 times)

edmundblackadder

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the most wonderful time of the year: benefits election
« on: October 13, 2016, 10:25:03 AM »
Does anyone have a good back-of-the-napkin worksheet or a tool of some kind to compare health plans, specifically insurance + FSA versus HDHP + HSA? I'm getting overwhelmed by the "literature" my HR department has sent out and can't see the forest for the trees.

BeanCounter

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Re: the most wonderful time of the year: benefits election
« Reply #1 on: October 13, 2016, 10:59:56 AM »
I think it would be hard to come up with a generic spreadsheet to evaluate this sort of thing. (although I'm curious to try)
First thing to figure out is what your average medical and Rx spend has been for the last 2-3 years. For example do you (and family if applicable) typically go to three "sick" visits with your physician annually? And what is your typical out of pocket cost for this? Do you typically have an ER visit in there (can be typical with kids) or some kind of a test like MRI? Etc.
Add those things up.
Then try and guess if anything might change, planning to have a baby or a procedure of some sort?
Add those things up.
If more of the items you typically use would be covered differently under different options, then weigh that decrease in out of pocket costs against any increase in premium you might pay less any increase in employer sponsored HRA/HSA funds.

As for FSA- those are your out of pocket pre tax dollars that you HAVE to SPEND or lose each year. So you need to plan carefully with this one.
HDHP - will have low premiums, but high deductible. You can contribute to the HSA with pre-tax dollar and they rollover and accumulate through retirement. This can be a very good option if you are a low utilizer. Like say, maybe one doctor visit (well visits are covered in full) and a couple Rx's. And you are comfortable with the risk of having to cover the high deductible until you have your HSA fund built up to the full amount of the deductible. So its a great option for those who have low medical and pharmacy needs, and have the cash flow to cover something unusual happening.

rantk81

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Re: the most wonderful time of the year: benefits election
« Reply #2 on: October 13, 2016, 11:10:12 AM »
Sometimes I think that the government should just throw away the entire portion of the tax code that deals with all of these various weird rules for deductions around medical expenses... and instead just allow everyone to deduct all their medical expenses every year.

edmundblackadder

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Re: the most wonderful time of the year: benefits election
« Reply #3 on: October 13, 2016, 12:36:21 PM »
Part of the problem is that I've had fairly high health care costs for the past couple of years, and probably won't have them for the next few, as long as I keep up with my medication (one of which is generic and one of which is birth control, currently not a generic but I could _probably_ get a different scrip), which makes estimating harder.

If I contribute the maximum to the HSA (which has a higher contribution limit than the FSA), my premiums and contributions come out about $200+ dollars more with the HDHP/HSA, and that's before any doctor visits and medication costs and whatnot.

This is so much harder than it needs to be.

BeanCounter

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Re: the most wonderful time of the year: benefits election
« Reply #4 on: October 13, 2016, 12:45:32 PM »
Part of the problem is that I've had fairly high health care costs for the past couple of years, and probably won't have them for the next few, as long as I keep up with my medication (one of which is generic and one of which is birth control, currently not a generic but I could _probably_ get a different scrip), which makes estimating harder.

If I contribute the maximum to the HSA (which has a higher contribution limit than the FSA), my premiums and contributions come out about $200+ dollars more with the HDHP/HSA, and that's before any doctor visits and medication costs and whatnot.

This is so much harder than it needs to be.
Well if you have doctor visits and medication you would use your HSA contributions to pay for that. And if you had contributions left over in your HSA they roll over and reduce your costs next year, and then even more the next year. Etc. If your utilization is low you could lower your contributions to your HSA next year. So would that be cheaper in the long run?
Also birth control is now covered in full by most plans per the ACA. It is not subject to a co-pay or a deductible. So you may want to check into why your plan is not covering it.

NoStacheOhio

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Re: the most wonderful time of the year: benefits election
« Reply #5 on: October 14, 2016, 09:42:36 AM »

Also birth control is now covered in full by most plans per the ACA. It is not subject to a co-pay or a deductible. So you may want to check into why your plan is not covering it.

It could be a formulary thing. I don't think they're required to cover all birth control in full, at least not until you've failed on the tier 1 options for your specific plan.

BeanCounter

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Re: the most wonderful time of the year: benefits election
« Reply #6 on: October 14, 2016, 09:45:24 AM »

Also birth control is now covered in full by most plans per the ACA. It is not subject to a co-pay or a deductible. So you may want to check into why your plan is not covering it.

It could be a formulary thing. I don't think they're required to cover all birth control in full, at least not until you've failed on the tier 1 options for your specific plan.
There are several reasons why it could not be covered. Grandfathering, church plan, some formulary exclusions, etc. But it is worth looking into so you can see if you could save some money. When this part of the ACA started it saved us around $1,200 a year!

Ebrat

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Re: the most wonderful time of the year: benefits election
« Reply #7 on: October 14, 2016, 11:43:34 AM »
Will your employer contribute anything to your HSA?

When we were deciding whether or not to switch to an HSA, we went through the process described above: listed out our typical/expected health care costs for the year, and compared the difference between what they were on our current plan and what they would be on the HDHP.  We compared that extra we'd be paying to what we'd be saving in premiums and what we'd be getting in terms of employer contributions to the HSA. For us (low utilizers--just wellness exams and 1 prescription), it was worth the switch. But it depends on:

a) how much more your medical costs will probably be (and remember to knock your marginal tax rate off that number since you'll be paying in pre-tax dollars)
b) how much less your premiums will be
c) how much your employer will kick in for the HSA

You could always post some concrete numbers if you're comfortable for feedback/ideas.

Also consider your risk tolerance and ability to cover the OOP maximum if needed.

edmundblackadder

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Re: the most wonderful time of the year: benefits election
« Reply #8 on: October 14, 2016, 08:54:24 PM »
Re: birth control -- I had to do some detective work and apparently it is covered, they just don't list bc as a preventative medication in the literature, because reasons. So that's good to know! Medication costs are not something I need to worry about! (Chronic illness, man, it is the WORST.)

Will your employer contribute anything to your HSA?

Alas, no.

I'm probably going to have some cash leftover in my FSA in December, and can roll over up to $500 to next year, so I think I'll do that plan for one more year and then get into the HSA in 2018. Thanks for all your help!
« Last Edit: October 15, 2016, 09:18:52 AM by edmundblackadder »

MDM

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Re: the most wonderful time of the year: benefits election
« Reply #9 on: October 15, 2016, 07:15:37 AM »
Does anyone have a good back-of-the-napkin worksheet or a tool of some kind to compare health plans, specifically insurance + FSA versus HDHP + HSA? I'm getting overwhelmed by the "literature" my HR department has sent out and can't see the forest for the trees.
Don't know about "good" but it certainly is "a tool of some kind" - see the 'HDHP Analysis' tab in the case study spreadsheet.

As noted in that link, if there are any blatant errors, please PM me.  Or post them for all to see: won't be the first nor last spreadsheet error I'll ever make.  Improvement requests will also be seriously considered, and several have already been implemented.  Of course, "this is not a commercial product" means some things will forever be out of scope but if the improvement would help a wide audience....