Author Topic: HDHP vs non-HDHP plans  (Read 803 times)

doneby35

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HDHP vs non-HDHP plans
« on: November 18, 2019, 06:09:50 PM »
I recently got offered a new job and it looks like they have far better health insurance options than the previous job. I've been typically using a HDHP plan for both my spouse and I for the past 3 years, which offers an HSA account that I've been maxing out up to the family contribution limit.

Our yearly medical expenses vary between I would say $1000-$4000 because of a chronic condition.

Considering the non-HDHP option 1 below that has a very low deductible is only $40 more a month, does it make sense to go with the HDHP plan? or are the tax benefits of having an HSA account a better option?

Option 1 (non-HDHP):
In-network individual deductible: $250
In-network family deductible: $750
In-network co-insurance after deductible: 100%
Monthly premium cost: $180

Option 2 (HDHP plan - no HSA employer match):
In-network individual deductible: $1500
In-network family deductible: $3000
In-network co-insurance after deductible: 90%
Monthly premium cost: $140

Thanks!

MDM

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Re: HDHP vs non-HDHP plans
« Reply #1 on: November 18, 2019, 06:28:33 PM »
Might be worth putting your numbers into a couple of comparison tools, e.g., Health Savings Account (HSA) vs. Traditional Health Plan and the 'HDHP Analysis' tab of the case study spreadsheet.

doneby35

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Re: HDHP vs non-HDHP plans
« Reply #2 on: November 20, 2019, 05:43:21 PM »
Thanks, all this time and I didn't know the case study spreadsheet had the HSA calculator.
I think the non-HDHP is going to be the winner. What do people who invest in an HSA for a few years and then stop typically do with the HSA account? do you just leave the invested money in there? or is there a better option?

Malum Prohibitum

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Re: HDHP vs non-HDHP plans
« Reply #3 on: November 20, 2019, 05:58:35 PM »
That is a pretty amazing benefit your work provides you.   On the exchange, for 2020, my family's insurance runs from $26,000 annually to over $50,000 annually, and none of them are anywhere near your Option 1, which, by the way, I would purchase in a heartbeat were I in your shoes.

charis

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Re: HDHP vs non-HDHP plans
« Reply #4 on: November 20, 2019, 06:40:34 PM »
Is there a plan contribution to the HSA for the HDHP?  I love maxing out an HSA (also have chronic condition in the family) and it would take a lot for me to give it up the tax advantaged space.  We max everything to keep our AGI low enough to get certain deductions and my plan contributes over half of the 3k deductible to my HSA.  It is invested in Vanguard index funds through TD Ameritrade, so we will either use it for future medical expenses or use it as a retirement account.

doneby35

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Re: HDHP vs non-HDHP plans
« Reply #5 on: November 20, 2019, 08:42:03 PM »
That is a pretty amazing benefit your work provides you.   On the exchange, for 2020, my family's insurance runs from $26,000 annually to over $50,000 annually, and none of them are anywhere near your Option 1, which, by the way, I would purchase in a heartbeat were I in your shoes.

I thought the exact same thing.

Is there a plan contribution to the HSA for the HDHP?  I love maxing out an HSA (also have chronic condition in the family) and it would take a lot for me to give it up the tax advantaged space.  We max everything to keep our AGI low enough to get certain deductions and my plan contributes over half of the 3k deductible to my HSA.  It is invested in Vanguard index funds through TD Ameritrade, so we will either use it for future medical expenses or use it as a retirement account.

You mean an employer contribution to the HSA? if so, then no they don't, it would just be my contribution from my paycheck. I think I would've made more sense if there was an employer contribution such as yours covering half the deductible.

charis

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Re: HDHP vs non-HDHP plans
« Reply #6 on: November 21, 2019, 07:48:09 AM »
That is a pretty amazing benefit your work provides you.   On the exchange, for 2020, my family's insurance runs from $26,000 annually to over $50,000 annually, and none of them are anywhere near your Option 1, which, by the way, I would purchase in a heartbeat were I in your shoes.

I thought the exact same thing.

Is there a plan contribution to the HSA for the HDHP?  I love maxing out an HSA (also have chronic condition in the family) and it would take a lot for me to give it up the tax advantaged space.  We max everything to keep our AGI low enough to get certain deductions and my plan contributes over half of the 3k deductible to my HSA.  It is invested in Vanguard index funds through TD Ameritrade, so we will either use it for future medical expenses or use it as a retirement account.

You mean an employer contribution to the HSA? if so, then no they don't, it would just be my contribution from my paycheck. I think I would've made more sense if there was an employer contribution such as yours covering half the deductible.

Not an employer contribution.  It's frequently called a "pass through," a credit issued by the health plan to the HSA.  I've never seen an HDHP HSA that didn't include a pass through, so I guess I've been lucky in that regard.  But your options are good, the monthly premiums are very low.  We pay 150 biweekly for lowest family hdhp.

doneby35

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Re: HDHP vs non-HDHP plans
« Reply #7 on: November 21, 2019, 09:44:29 AM »
That is a pretty amazing benefit your work provides you.   On the exchange, for 2020, my family's insurance runs from $26,000 annually to over $50,000 annually, and none of them are anywhere near your Option 1, which, by the way, I would purchase in a heartbeat were I in your shoes.

I thought the exact same thing.

Is there a plan contribution to the HSA for the HDHP?  I love maxing out an HSA (also have chronic condition in the family) and it would take a lot for me to give it up the tax advantaged space.  We max everything to keep our AGI low enough to get certain deductions and my plan contributes over half of the 3k deductible to my HSA.  It is invested in Vanguard index funds through TD Ameritrade, so we will either use it for future medical expenses or use it as a retirement account.

You mean an employer contribution to the HSA? if so, then no they don't, it would just be my contribution from my paycheck. I think I would've made more sense if there was an employer contribution such as yours covering half the deductible.

Not an employer contribution.  It's frequently called a "pass through," a credit issued by the health plan to the HSA.  I've never seen an HDHP HSA that didn't include a pass through, so I guess I've been lucky in that regard.  But your options are good, the monthly premiums are very low.  We pay 150 biweekly for lowest family hdhp.

Ah, I've never heard about premium pass through before. Is that typically something that the employer negotiates with the HSA provider? or is it some setting that can be found in the HSA provider's portal?

DadJokes

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Re: HDHP vs non-HDHP plans
« Reply #8 on: November 21, 2019, 12:25:24 PM »
I agree that the non-HDHP looks like the winner, but be mindful of your out-of-pocket maximum as well. It is usually higher with non-HDHP, so major items can end up costing a lot more.

doneby35

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Re: HDHP vs non-HDHP plans
« Reply #9 on: November 21, 2019, 01:37:58 PM »
I agree that the non-HDHP looks like the winner, but be mindful of your out-of-pocket maximum as well. It is usually higher with non-HDHP, so major items can end up costing a lot more.

I did look into that, option 1 specifies the following which is a little confusing:
After reaching deductible which is $250 for individual or $750 for family, in-network co-insurance is 100% and out of pocket is $3000 for individual or $6000 for family. So if I have a medical bill of $250, it would be fully out of pocket and i'll reach the deductible, and then after that 100% of co-insurance is covered by insurance? so why would there be a need for out of pocket limit of $3000 for individual or $6000 for family?

charis

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Re: HDHP vs non-HDHP plans
« Reply #10 on: November 21, 2019, 02:32:38 PM »
I can't speak to how the pass-through comes to be, but the amount would be included in the brochure for the HDHP plan in question. 

I also can't speak to your plan, but if you or a family member travels and ends up in an out of network hospital, etc, you would not be covered 100% and that's where the out of pocket limit comes into play.  I've also heard of people thinking that they are in a covered facility, but they unknowingly end up with a provider/procedure that is out of network.  Or, for example, we have one provider that doesn't take any insurance but we will keep using that service for good reasons.  Those costs are not covered after we meet the deductible but still count toward the out of pocket max.