Author Topic: Health Insurance Help  (Read 1476 times)

Gimesalot

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Health Insurance Help
« on: April 14, 2014, 09:24:09 AM »
I just started a new job and have to pick if I want their insurance or go through the market place. 
 
First option:  Work
$125 a month
$1500 deductible
Modeled after high deductible plan, but no HSA allowed

Second Option: Exchange
$225 a month
$3000 deductible
HSA allowed

I don't use much healthcare.  Two visits a year, and one or two medications a year.  I just hate the having a plan that is as bare bones as a high deductible plan without the tax advantage.  So I am not sure what to do.

Here are my questions:
Can I deduct the cost of the exchange plan from my taxes, at the end of the year?
Which plan would you pick?

Thanks.


NumberCruncher

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Re: Health Insurance Help
« Reply #1 on: April 14, 2014, 10:11:56 AM »
Are the health plans really equivalent (besides premiums/deductible)? No difference in coverage or co-pays?

There's three big things here:

(1) premiums deductible/tax free?
I think the marketplace plan is deductible only if you itemize deductions and incur significant medical costs- someone else correct me if I'm wrong - http://www.forbes.com/sites/kellyphillipserb/2012/11/26/tax-breaks-for-medical-expenses-under-obamacare/. So advantage workplace plan (assuming you can make pre-tax payments for the $1500 of premiums).

(2) difference in premiums
Immediate $1200/year savings for employer coverage

(3) tax savings of the HSA
$3,300 tax free in and out - the tax savings really depend on your tax bracket, much like (1).


Eh...depends on your tax bracket and if you itemize already. In my case, they'd end up being roughly equivalent in terms of tax savings and I'd choose the workplace plan due to the lower deductible.

chucklesmcgee

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Re: Health Insurance Help
« Reply #2 on: April 14, 2014, 08:22:58 PM »
I would take the HSA plan. An HSA is like a secret super IRA. You have a $3300 deduction AND all those investment earnings will be tax free when you take it out. That can easily be worth more than $1200 a year. You do have to consider the higher deductible, but if you've got the cash around to cover it, I'd say it's a gamble worth taking.