Author Topic: How to choose health insurance  (Read 1066 times)

Guizmo

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How to choose health insurance
« on: April 30, 2017, 07:08:09 PM »
My employer has 6 new health insurance plan. How do you choose between a regular plan and an HSA eligible plan? Is there a point where it makes more sense to have the traditional plan vs the HSA eligible plan? The difference is premiums is about $80 a month an the company would put in about $500 a year if we choose the HSA plan.

So what are the things you look for when choosing plans??

RedmondStash

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Re: How to choose health insurance
« Reply #1 on: April 30, 2017, 08:43:26 PM »
HSAs can be useful because they're funded with pre-tax dollars, and, if you spend the money on medical expenses, you never pay taxes on them, even if you spend that money many years after you put it in. If you spend the money on non-medical expenses, you do pay taxes on it when you withdraw it, so the HSA functions sort of like an IRA with extra benefits for medical expenses.

But be sure it's an HSA and not an FSA, because in an FSA, you lose any unspent money in that account at the end of the year.

Seems like if it costs you an extra $80 but your employer puts in $500, you net $420. But my guess is there are other factors, because most HSA-eligible health plans have high deductibles too.

cacaoheart

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Re: How to choose health insurance
« Reply #2 on: April 30, 2017, 09:12:18 PM »
Is the extra $80 a month for an individual plan or family plan? If it's just $80 extra for a low deductible family plan it may be worth it. When I had an individual policy I went with an HSA, but as I began looking for family coverage I was informed that HSA qualified family plans don't have individual deductibles, meaning no one is covered until the family deductible is met, which at my employer can be $3,000 to $6,000 depending on which network the provider is in. My employer would put $1000 per year into the HSA and premiums are much cheaper, but with my daughter being born this year I decided to opt for the traditional low deductible plan. I'm still weighing if/when it would be worth switching back to an HSA plan.

"The difference between the traditional type of health insurance deductible system and the family deductible in an HDHP health plan is that the individual deductible is eliminated in family HDHP coverage. There is only one way the HDHP health plan will begin to pay benefits for any family member: the family deductible has been met."

https://www.verywell.com/how-the-family-deductible-works-in-an-hdhp-1738662


GizmoTX

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Re: How to choose health insurance
« Reply #3 on: May 01, 2017, 04:56:51 AM »
The OP didn't say the HSA is an extra $80, just that the difference is $80 -- it's likely less than the traditional. For a healthy individual, lower premiums plus the employer HSA contribution that the employee owns & controls usually is the better deal. Further employee contributions up to the max annual limit of $3300 are pre-tax & lower the AGI & payroll taxes. Depending on the plan, the HSA can be invested for growth if the employee wishes. For families, the choice is more problematic, unless the plan includes some doctor visits.