Author Topic: My megacorp is offering HSA next year...  (Read 3176 times)

liquidcheese

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My megacorp is offering HSA next year...
« on: November 12, 2016, 06:42:31 AM »
So my megacorp is offering a HDHP plan with an HSA next year, and they will put in $1,000 into my HSA just for signing up for the HDHP plan. The name of the HSA company they are using is Health Equity. It sounds like a great deal, but want to make sure I'm not blinded by the free money they are going to give me.  I am trying to compare the pros and cons with my current health insurance plan to see if its worth the risk of a high deductible plan when I have 2 kids, ages 8 and 6.  We barely even reached our family deductible of $900 this year, however I keep hearing from coworkers that I would be nuts to take the HDHP with 2 kids that could land in the ER at any time.  I also have controlled type 2 diabetes, which since I have controlled for some time, I only have to get a fasting lab and follow up visit once a year now.  My wife only goes to the dr once or twice a year for birth control.  Any minor illness, we go to a quickcare for $49 instead of going to a dr.  I would like to hear what you all would do in this scenario. The higher deductible really doesn't phase me, but should it?  Here is a comparison between my two options.  Both are through UnitedHealthcare.

Sticking with my current PPO plan -
Cost - $228/month
Deductible -$800 individual/$1600 family (this year it was $450/$900 so it is going up!)
Max out of pocket - $3,000 individual/$6,000 family
80% covered after deductible is met, all generic and "tier 1" prescriptions are $0 which covers all prescriptions we ever need.

HDHP plan -
Cost - $70
Deductible - $3,000 individual/$6,000 family, however you have to reach family deductible before they start paying 80%
Max out of pocket - $5,000 family/$10,000 deductible
80% covered after deductible is met, only preventative prescriptions are $0 which would include my diabetes medication.  My wife's birth control would not be covered, but would be probably around $30 a month.
« Last Edit: November 12, 2016, 06:44:41 AM by liquidcheese »

Roland of Gilead

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Re: My megacorp is offering HSA next year...
« Reply #1 on: November 12, 2016, 06:44:21 AM »
Amazing they will cover a $30,000 pregnancy but not a $30 pill to prevent one.

liquidcheese

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Re: My megacorp is offering HSA next year...
« Reply #2 on: November 12, 2016, 06:49:29 AM »
Let me rephrase that, the BC would go towards the $6,000 deductible and then be covered after we reach the deductible.  But I don't ever see us reaching the $6,000 deductible.

GetItRight

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Re: My megacorp is offering HSA next year...
« Reply #3 on: November 12, 2016, 03:28:24 PM »
I have a HDHP/HSA and think it's great compared to a PPO, aside from the generally high cost and hassle created since Obamacare. Tax savings and additional investment options via the HSA, minimal coverage as I can get under the unconstitutional and socialist health insurance laws, reasonable deductible and max OOP I can plan for in case of a major event. I compared all scenarios of the PPO vs HSA offerings from my employer and the HSA plans are cheaper whether you use none, max them out, or anywhere inbetween.

I plugged your numbers into my spreadsheet, see attached image. Your net cost under HSA may be slightly more as I assume 25% tax bracket, but you mentioned having a couple deductions (kids) though should be pretty close on net cost. I assumed a minor incident to be 2500. I assume only putting money into the HSA as you have eligible medical spending, if you don't have debt and are maxing investments you can get the max tax savings every year and offset the plan cost/deductible with that if that's how you prefer to math. I would do the HSA plan as it saves you around $2k/yr at lower usage and totally maxing it out only costs $1k more. Unless you can reasonably expect to max out your OOP every year the HSA is cheaper.
« Last Edit: November 12, 2016, 03:33:19 PM by GetItRight »

v8rx7guy

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Re: My megacorp is offering HSA next year...
« Reply #4 on: November 12, 2016, 04:03:02 PM »
Here is a spreadsheet screenshot that I put together that shows graphically what your cost out of pocket will be vs. your yearly medical costs.  The HSA looks to be the better option.  This is for the FAMILY numbers, and it does not take into account tax benefits.  I can re-run it for individual too, if you'd like.

v8rx7guy

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Re: My megacorp is offering HSA next year...
« Reply #5 on: November 12, 2016, 04:07:51 PM »
Here is the graph with the INDIVIDUAL deductible and OOP Max numbers.

Rocketman

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Re: My megacorp is offering HSA next year...
« Reply #6 on: November 12, 2016, 07:25:00 PM »
If you get the HSA be sure and run ALL medical expenses through it.  It reduces your AGI on taxes. Also, any contributions you make via payroll will reduce your FICA.  if something bad happens medically and you need to pay out more than you have contributed you can add money to your HSA then pay it out with Healthequity's debit card.

If your HealthEquity account is like mine - once you have 2k saved in the cash account you can move the excess into the market.  I have acces to a bunch of managed funds and also a bunch of Vanguards index funds (although there is a small monthly charge to use the index funds.

The thing I like about the HSA is after a few years (assuming you are healthy) you build up enough to cover the max - then build it more.

I recommend to all my coworkers to put in at least the difference between the two plans plus what you think you will spend this year on medical out of pocket.  That way your fund can grow so if/when you have a bad year you have already saved up for it.  If your budget can handle it put the max in.

bradleylsmith

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Re: My megacorp is offering HSA next year...
« Reply #7 on: November 12, 2016, 10:50:09 PM »
If you get the HSA be sure and run ALL medical expenses through it.  It reduces your AGI on taxes. Also, any contributions you make via payroll will reduce your FICA.

I just got my first HSA this year, and have been paying for all medical expenses with cash and letting the HSA grow - keeping my receipts. Is that not the right way to do this? I thought you want to use the HSA money as a retirement fund because it acts like a hyped up 401k. Am I missing something?

PlainsWalker

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Re: My megacorp is offering HSA next year...
« Reply #8 on: November 14, 2016, 10:16:01 AM »
I just got my first HSA this year, and have been paying for all medical expenses with cash and letting the HSA grow - keeping my receipts. Is that not the right way to do this? I thought you want to use the HSA money as a retirement fund because it acts like a hyped up 401k. Am I missing something?

That is the Mad Fientist approach and what I am doing myself.

Case

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Re: My megacorp is offering HSA next year...
« Reply #9 on: November 14, 2016, 10:24:51 AM »
So my megacorp is offering a HDHP plan with an HSA next year, and they will put in $1,000 into my HSA just for signing up for the HDHP plan. The name of the HSA company they are using is Health Equity. It sounds like a great deal, but want to make sure I'm not blinded by the free money they are going to give me.  I am trying to compare the pros and cons with my current health insurance plan to see if its worth the risk of a high deductible plan when I have 2 kids, ages 8 and 6.  We barely even reached our family deductible of $900 this year, however I keep hearing from coworkers that I would be nuts to take the HDHP with 2 kids that could land in the ER at any time.  I also have controlled type 2 diabetes, which since I have controlled for some time, I only have to get a fasting lab and follow up visit once a year now.  My wife only goes to the dr once or twice a year for birth control.  Any minor illness, we go to a quickcare for $49 instead of going to a dr.  I would like to hear what you all would do in this scenario. The higher deductible really doesn't phase me, but should it?  Here is a comparison between my two options.  Both are through UnitedHealthcare.

Sticking with my current PPO plan -
Cost - $228/month
Deductible -$800 individual/$1600 family (this year it was $450/$900 so it is going up!)
Max out of pocket - $3,000 individual/$6,000 family
80% covered after deductible is met, all generic and "tier 1" prescriptions are $0 which covers all prescriptions we ever need.

HDHP plan -
Cost - $70
Deductible - $3,000 individual/$6,000 family, however you have to reach family deductible before they start paying 80%
Max out of pocket - $5,000 family/$10,000 deductible
80% covered after deductible is met, only preventative prescriptions are $0 which would include my diabetes medication.  My wife's birth control would not be covered, but would be probably around $30 a month.

I have had Health Equity and they suck big time.  Mostly in that they have messed up several times when I have transferred money in or out.  But also in that they don't have great investment options.

What you'll want to go is use Health Equity as the place your HSA funds go into (from your pay check) but them transfer into a different HSA with better investment options (unless you plan to spend most of your HSA funds, in which case it doesn't matter as much).

Health Equity (in one instance, there were a few) charged me an account closure fee when I didn't actually close an account.  They had a worthless customer service rep who handled my case very poorly; eventually I got it escalated to one of their VPs (over $25!) and they eventually gave me my money back, but for it to get that far I had to file a complaint with the BBB.  It was a huge pain in the ass.

Use Health Equity if you are required by the employer but my recommendation is to periodically transfer your money out of there.  Btw, the current HSA provider (where I periodically transfer my money too) has told me that Health Equity regularly messes up paper work in the fund transfer process.
« Last Edit: November 14, 2016, 10:58:21 AM by Case »

acroy

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Re: My megacorp is offering HSA next year...
« Reply #10 on: November 14, 2016, 10:40:10 AM »
Wow, nice response by v8rx7guy

HDHP! it has worked fine for our family. You're doing great managing the costs.

Need2Save

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Re: My megacorp is offering HSA next year...
« Reply #11 on: November 14, 2016, 06:01:39 PM »
  Both are through UnitedHealthcare.

Sticking with my current PPO plan -
80% covered after deductible is met, all generic and "tier 1" prescriptions are $0 which covers all prescriptions we ever need.

HDHP plan -
80% covered after deductible is met, only preventative prescriptions are $0 which would include my diabetes medication.  My wife's birth control would not be covered, but would be probably around $30 a month.

ACA compliant health plans must cover women's birth control at 100% even if you haven't met your deductible yet.  When you say your wife's BC 'would not be covered' under the HDHP section - do you mean specifically that her brand of birth control is not covered by the UHC HDHP and she would have to switch to another brand or that they do not cover any birth control at all?  I work with UHC.  I am confident they know about the birth control mandate so I would be very surprised, but maybe it was just the way you worded it?

Sounds like you come out ahead financially with the HDHP.  We've had one for 8 years going strong and do not regret it at all.  http://need2save.com/2016/09/no-fear-health-savings-accounts/

Jim Fiction

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Re: My megacorp is offering HSA next year...
« Reply #12 on: November 14, 2016, 08:21:59 PM »
I just got my first HSA this year, and have been paying for all medical expenses with cash and letting the HSA grow - keeping my receipts. Is that not the right way to do this? I thought you want to use the HSA money as a retirement fund because it acts like a hyped up 401k. Am I missing something?

That is the Mad Fientist approach and what I am doing myself.

My wife and I plan to do this once I have paid down my student loans. In the meantime we are simply using it for the tax savings and reimbursing ourselves for nearly every medical expense.

JLee

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Re: My megacorp is offering HSA next year...
« Reply #13 on: November 14, 2016, 08:29:54 PM »
I just got my first HSA this year, and have been paying for all medical expenses with cash and letting the HSA grow - keeping my receipts. Is that not the right way to do this? I thought you want to use the HSA money as a retirement fund because it acts like a hyped up 401k. Am I missing something?

That is the Mad Fientist approach and what I am doing myself.

I do that as well.

Malum Prohibitum

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Re: My megacorp is offering HSA next year...
« Reply #14 on: November 15, 2016, 01:16:36 PM »
If you get the HSA be sure and run ALL medical expenses through it.  It reduces your AGI on taxes. Also, any contributions you make via payroll will reduce your FICA.

I just got my first HSA this year, and have been paying for all medical expenses with cash and letting the HSA grow - keeping my receipts. Is that not the right way to do this? I thought you want to use the HSA money as a retirement fund because it acts like a hyped up 401k. Am I missing something?
  You are not missing anything.  Simply making the contributions lowers your AGI.  It has nothing to do with reimbursements for medical expenses.