Picking a healthcare plan at my new job (first corporate)

[zoochadookdook]

Hey all. Recently took a new job and am comparing the two health plans they offer. One is a HSA one is a standard plan.

Employer contribution is 50% for Medical/vision for employees (25% for dependents)

Life/disability 100% paid

Dental are 100% employee paid

HSA total annual contributions are $3450 employee/$6900 employee and dependents

Monthly premium after employee contribution at my age:

Base plan: $170.41/month

HAS/ buy up plan: $230/month

Dental: 40.33/month

I’m 27. Single. No major health issues, although I do compete in sports quite a bit.



Base plan overview: (all single, first number series/number is In-network costs-Second is out of network)

Deductible: 500/7500

Coinsurance:10%/50%

Out of pocket max: $4000/$15000

Doc visits (PCP/Specialist/Virtual): 10,20,0/50% after deductible

Preventive care: no charge

Imaging: 10% after deductible / 50% after deductible

Deductible: none

Tiers 1/2/3/4: 15/35/70/125 / 50% After deductible

Impatient hospital: 10% after deductible/50% after deductible

Outpatient: 10% after deductible/50% after deductible

ER visits: 10% after deductible

Urgent care: 10 copay/50% after deductible



HSA overview: (all single, first number series/number is In-network costs-Second is out of network)

Deductible: 3500/7500

Coinsurance: 0%/50% after deductible

Out of pocket max: $4500/$15000

Doc visits (PCP/Specialist/Virtual): 0%/50% after deductible

Preventive care: no charge

Imaging: 0% after deductible / 50% after deductible

Deductible: none

Tiers 1/2/3/4: 15/45/90/350 / ?

Impatient hospital: 0% after deductible/50% after deductible

Outpatient: 0% after deductible/50% after deductible

ER visits: 0% after deductible

Urgent care: 0%/50% after deductible



Dental:

Deductible: $40/$50

Preventive: 0%/10% (deductible does not apply)

Basic services: 20% after deductible/20% of UCR after deductible

Major services: 50% after deductible/50% of UCR after deductible

Annual benefit max: $2000/2000



Any advice on which one to choose? I know an HSA can be used forever and has tri tax benefits. Just trying to make the best choice.



Thanks

[erutio]

First of all, I followed the other threads, so congratulations on your move and your new job.  I know it was easy, and I wish you well as you continue your journey.

HSA total annual contributions are $3450 employee/$6900 employee and dependents

Just need a clarification.  Is this contribution limit, or does your employer actually contribute $3450 annually into your HSA for you?

[terran]

And the HSA plan is actually more expensive than the other plan? Other than having access to an the tax savings of an HSA, paying less for the plan is usually the big advantage. Unless the employer is contributing to the HSA I don't think I would generally choose an HSA plan that cost more than a plan with better coverage.

As you can see, dental insurance tends to cover fairly little in the sense of actual insurance (only $2000), so I usually just evaluate them vs paying for cleanings out of pocket. In your case, if you can get 2 cleanings per year, one of which has x-rays for less than $483.96 then I would skip the dental insurance. Make sure you get the uninsured price from your dentist since it will involve less paperwork for them.

[zoochadookdook]

Sorry! So i went to set up my benefits today and realized I had them wrong.
The $192/month is the HSA below; I believe there is no employer match
The BG5E  is 240/month. Proper list is as is below.


In-Network Services

2019 Choice Plus HSA Silver BG5C   2019 Choice Plus Platinum BG5E

General Provisions

Deductible: Individual   $3,500   $500

Deductible: Family   $7,000   $1,000

Maximum out-of-pocket: Individual   $4,500   $4,000

Maximum out-of-pocket: Family   $9,000   $8,000

Copays & Coinsurance

Coinsurance   0% after deductible   10% after deductible

Primary Care Physician   0% after deductible   $10 copay

Specialists Physician   0% after deductible   $20 copay

Laboratory Services   0% after deductible   No Charge

MRI and other High Tech Services   0% after deductible   10% after deductible

Urgent Care Facility   0% after deductible   $10 copay

Hospitalization: Inpatient   0% after deductible   10% after deductible

Hospitalization: Outpatient   0% after deductible   10% after deductible

Hospitalization: Emergency Room   0% after deductible   10% after deductible

Prescriptions

Prescription Deductible   Medical Deductible   None

Generic   $15 copay after deductible   $15 copay

Formulary Brand Name   $45 copay after deductible   $35 copay

Non-Formulary Brand Name   $90 copay after deductible   $70 copay

Specialty   $250 copay after deductible   $350 copay

Out-Of-Network Services

2019 Choice Plus HSA Silver BG5C   2019 Choice Plus Platinum BG5E

General Provisions

Deductible: Individual   $7,500   $7,500

Deductible: Family   $15,000   $15,000

Maximum out-of-pocket: Individual   $15,000   $15,000

Maximum out-of-pocket: Family   $30,000   $30,000

Copays & Coinsurance

Coinsurance   50% after deductible   50% after deductible

Primary Care Physician   50% after deductible   50% after deductible

Specialists Physician   50% after deductible   50% after deductible

Laboratory Services   50% after deductible   50% after deductible

MRI and other High Tech Services   50% after deductible   50% after deductible

Urgent Care Facility   50% after deductible   50% after deductible

Hospitalization: Inpatient   50% after deductible   50% after deductible

Hospitalization: Outpatient   50% after deductible   50% after deductible

Hospitalization: Emergency Room   0% after deductible   10% after deductible

Prescriptions

Prescription Deductible   Medical Deductible   None

Generic   50% after deductible   50% after deductible

Formulary Brand Name   50% after deductible   50% after deductible

Non-Formulary Brand Name   50% after deductible   50% after deductible

Specialty   50% after deductible   50% after deductible

[pk_aeryn]

If you’re young and take no medications, HSAs are almost always the winner.  The question is, do you have enough in savings to pay for your out of pocket max in case you get a sports injury?  Are you the kind of person when faced with paying out of pocket won’t get treatment for something when you really should?  If you’re not scared about dropping a few hundred out of pocket for a random visit, and prepared for a bigger bill with a sports injury, then go for it.  If you’te the type that would risk a leg healing improperly just to save the $4500 (Or because you don’t have it), then might be better for a regular health plan.

[zoochadookdook]

If you’re young and take no medications, HSAs are almost always the winner.  The question is, do you have enough in savings to pay for your out of pocket max in case you get a sports injury?  Are you the kind of person when faced with paying out of pocket won’t get treatment for something when you really should?  If you’re not scared about dropping a few hundred out of pocket for a random visit, and prepared for a bigger bill with a sports injury, then go for it.  If you’te the type that would risk a leg healing improperly just to save the $4500 (Or because you don’t have it), then might be better for a regular health plan.

So an HSA is the winner generally due to the tax breaks on the contributions I make correct?

At 190 vs 240/with a 3500 or so contribution I can make on top to it (no employer match I believe as a contractor) I'm trying to see it in laymans tems.

[Roots&Wings]

Yes, HSA's have triple tax benefits (deductible contributions, tax free growth and withdrawals for medical expenses; funds can be used for anything after age 65, not limited to medical expenses), and are generally the way to go if you're maxing out 401k to company match (see Investment Order: https://forum.mrmoneymustache.com/investor-alley/investment-order/msg1333153/#msg1333153).

Are you limited in your HSA custodian or can you pick a low fee HSA provider like Fidelity?

[zoochadookdook]

Yes, HSA's have triple tax benefits (deductible contributions, tax free growth and withdrawals for medical expenses; funds can be used for anything after age 65, not limited to medical expenses), and are generally the way to go if you're maxing out 401k to company match (see Investment Order: https://forum.mrmoneymustache.com/investor-alley/investment-order/msg1333153/#msg1333153).

Are you limited in your HSA custodian or can you pick a low fee HSA provider like Fidelity?

I'll have to call and ask. with the difference WITH my contribution that's a large dependency assuming no employer contribution.

[bacchi]

So an HSA is the winner generally due to the tax breaks on the contributions I make correct?

At 190 vs 240/with a 3500 or so contribution I can make on top to it (no employer match I believe as a contractor) I'm trying to see it in laymans tems.

How are you a contractor yet you're getting a health plan from the employer? Is it through the agency? Will you get a W2 or a 1099?

[zoochadookdook]

So an HSA is the winner generally due to the tax breaks on the contributions I make correct?

At 190 vs 240/with a 3500 or so contribution I can make on top to it (no employer match I believe as a contractor) I'm trying to see it in laymans tems.

How are you a contractor yet you're getting a health plan from the employer? Is it through the agency? Will you get a W2 or a 1099?

My last job I was a w2 contractor directly through the company with no benefits. This position I'm a contractor billed to another company; but my direct company is offering the health plan. I believe they are not using an external agency so this is all internal. I also get a unmatched 401k. W2 again.

[seattlecyclone]

Here's how I would do a basic comparison between the two:

Best case, you need no health care at all during the year.
HSA plan would cost you $192/month * 12 months = $2,304
Non-HSA plan would cost you $240/month * 12 months = $2,880

Semi worst case, you need millions of dollars worth of cancer treatment, but you find decent care options within the network.
HSA plan would cost you $2,304 premiums + $4,500 out-of-pocket maximum: $6,804
Non-HSA plan would cost you $2,880 premiums + $4,000 out-of-pocket maximum: $6,880

Worst worst case, you need to go out of network for some of your care.
HSA plan would cost you $2,304 premiums + $15,000 out-of-pocket maximum: $17,304
Non-HSA plan would cost you $2,880 premiums + $15,000 out-of-pocket maximum: $17,880

In the best case and the worst cases the HSA plan comes out a bit ahead. What about in between? The non-HSA plan has a lower deductible but higher coinsurance. From what I can tell, the only in-network thing you actually have to pay for with the HSA plan after hitting your deductible is prescriptions, and even then it's limited to $1,000 of copays. Is that right?

The non-HSA plan seems to do best if you have just enough medical bills to hit the HSA plan deductible: you'd be about $2,000 behind by going with the HSA plan in this case. As your medical bills increase from there, the gap narrows because you're going to be paying the coinsurance or copays on the non-HSA plan.

This is before considering the tax benefits of funding an HSA. The tax savings depends on your tax bracket; the more money you make, the better of a deal it is. Figure out the tax savings from the HSA and add it to the benefit (or disadvantage) from the HSA plan in the different scenarios you might envision for medical care, and use that to come to a decision. It will probably be the case that you can envision scenarios where either plan is a better deal; you just have to guess how likely each of these are and weigh them against each other. From what I can tell there isn't a huge amount of downside to either choice.