Author Topic: Please help select health plan! HDHP/HSA or PPO fast!  (Read 4784 times)

Mrs.FamilyFinances

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Please help select health plan! HDHP/HSA or PPO fast!
« on: April 29, 2014, 09:18:25 PM »
Hi all!

I have a question about which new health plan to choose. My husbands employer has a habit of changing health plans every year (chasing teaser rates no doubt), and this year is no exception. We received the new paperwork yesterday, and its due back tomorrow. They are offering a HDHP/HSA and PPO through Premera.  The monthly premiums are covered by the employer for both of us, as he has been employed with this company for 10 years now, so its not so much a mater of the monthly cost, but more a long term question.

We are currently expecting, and are interested in minimizing out out of pocket expenses. Being born in the US an expensive endeavor! Knowing full well I will need a c-section, it will certainly not be cheap by any means.

The deductible for the HDHP is $5,000, coinsurance is 10%, and out of pocket maximum is $10,000 PCY, office visit cost share is deductible, then 10%.

The deductible for the PPO is $ 3,000, coinsurance is 10%, and out of pocket maximum is $6,000 PCY, office visit cost share is $40

We are typically very healthy people, who don't go to the doctor more than absolutely needed. I think we have been to the Dr. 3 times in the last five years, for anything other than basic checkups. Neither of us take medication, but I may need blood pressure meds for the pregnancy.

The employer is offering a $1,000 contribution for anybody willing to sign up on the HSA plan. I also understand that it gives us a quality savings vehicle in terms of reduced taxable income, and potential to use contributions for retirement medical expenses, and non taxable growth. But does this really offset the vast differences in the deductibles, OOP maximums and such? We are open to changing to the HSA next year when we don't have a birth to plan around, and using it as yet another savings opportunity. We are already contributing to both 401(k) and Roth IRA accounts, and saving 35% of take home pay, if that makes any difference.


Hopefully I have given enough information for some responses from the awesome forum. I'm feeling pressured by the tight deadline, and don't want to make a short sighted decision. 

homeymomma

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Re: Please help select health plan! HDHP/HSA or PPO fast!
« Reply #1 on: April 29, 2014, 09:26:27 PM »
Why do you assume it needs to be a long term decision if it changes every year? I must be misunderstanding.

We are also expecting. It's so expensive, holy cow. I'd go with the lower out of pocket max, because the c section will probably get you there.

The co-pay also may not be as much of a problem as you might assume. Most well-baby stuff is covered without a co-pay.

Have happy healthy pregnancy! ;)

Mrs.FamilyFinances

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Re: Please help select health plan! HDHP/HSA or PPO fast!
« Reply #2 on: April 29, 2014, 09:31:31 PM »
Why do you assume it needs to be a long term decision if it changes every year? I must be misunderstanding.

We are also expecting. It's so expensive, holy cow. I'd go with the lower out of pocket max, because the c section will probably get you there.

The co-pay also may not be as much of a problem as you might assume. Most well-baby stuff is covered without a co-pay.

Have happy healthy pregnancy! ;)

Sorry, what I truly meant was that the monthly premium is not the base of the question, but rather the bigger, yearly fiscal picture. When I googled my question, everybody seemed to be focused on having the lowest premiums, rather than the tax advantages vs. one time medical needs.

Daleth

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Re: Please help select health plan! HDHP/HSA or PPO fast!
« Reply #3 on: April 29, 2014, 09:42:50 PM »
My rule of thumb: if you're expecting or planning to have a kid in the coming year, don't get an HSA. Same deal if you just got diagnosed with something requiring major surgery... Basically, regular insurance is for years when you know or plan to have major expenses; HSA's are for other years.

alibean

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Re: Please help select health plan! HDHP/HSA or PPO fast!
« Reply #4 on: April 29, 2014, 09:49:53 PM »
With the high deductible plan, you do get to have an HSA.  As far as I have ever heard, they money can only ever be used for healthcare expenses.  The money is rolled over year to year and you put it in the acct pre-tax. 

With the PPO, you should be able to get a flexible spending account.  Usually, this can be up to $2500/year and is also pre-tax.  If you don't use the money within the plan year though, it is gone. 

All of your OB well visits are preventative care and should not require a co-pay.  So, the biggest factor cost-wise is the birth.  That $1K from the company will not put a dent in it with a huge deductible like that.  Personally, I would go for the PPO for the year the baby is being born and switch to the high deductible plan the next year. 

Mrs.FamilyFinances

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Re: Please help select health plan! HDHP/HSA or PPO fast!
« Reply #5 on: April 29, 2014, 09:51:06 PM »
My rule of thumb: if you're expecting or planning to have a kid in the coming year, don't get an HSA. Same deal if you just got diagnosed with something requiring major surgery... Basically, regular insurance is for years when you know or plan to have major expenses; HSA's are for other years.

Thank you! I can see us being happy with the HSA at any other time than now! I was blown away by the cost of having a child here!

Mrs.FamilyFinances

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Re: Please help select health plan! HDHP/HSA or PPO fast!
« Reply #6 on: April 29, 2014, 09:55:54 PM »
With the high deductible plan, you do get to have an HSA.  As far as I have ever heard, they money can only ever be used for healthcare expenses.  The money is rolled over year to year and you put it in the acct pre-tax. 

With the PPO, you should be able to get a flexible spending account.  Usually, this can be up to $2500/year and is also pre-tax.  If you don't use the money within the plan year though, it is gone. 

All of your OB well visits are preventative care and should not require a co-pay.  So, the biggest factor cost-wise is the birth.  That $1K from the company will not put a dent in it with a huge deductible like that.  Personally, I would go for the PPO for the year the baby is being born and switch to the high deductible plan the next year.

Is flex spending account typically part of PPO? The paperwork doesn't mention that anywhere, could it be that we aren't offered one? Funny that of all the forms we were given, listing all sorts of random expenses and medical needs, it doesn't talk about maternity coverage at all. I didn't think it would be considered preventative, but again, I have no way of knowing, or even calling the insurance company because the forms are due back tomorrow. Thanks for your info!

mxt0133

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Re: Please help select health plan! HDHP/HSA or PPO fast!
« Reply #7 on: April 29, 2014, 11:39:44 PM »
Yes you are eligible to contribute to a flexible spending account if you don't go with a HSA.  I would recommend at least putting the amount of your PPO deductible but since you know your having a baby, you can use it for thermometers, prescriptions, ect.  I would put a little extra since you know you'll have a lot of misc medical expenses with the child birth.

Freedom2016

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Re: Please help select health plan! HDHP/HSA or PPO fast!
« Reply #8 on: April 30, 2014, 05:49:04 AM »
Yes you are eligible to contribute to a flexible spending account if you don't go with a HSA.  I would recommend at least putting the amount of your PPO deductible but since you know your having a baby, you can use it for thermometers, prescriptions, ect.  I would put a little extra since you know you'll have a lot of misc medical expenses with the child birth.

I believe this depends on the employer. Mine does not offer a flex spending account option, but my husband's previous employer did.

JamesL

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Re: Please help select health plan! HDHP/HSA or PPO fast!
« Reply #9 on: April 30, 2014, 06:31:57 AM »
I was able to get a Flex account and the HSA. I just finished my open enrollment benefits yesterday. I'd agree, that you shouldn't do the HSA until you have your child. Once you switch, I'd recommend maxing out your HSA (~3k+/yr) and then putting some money into a Flex account. That's what I did, so I can use the HSA later down the road (and let the funds grow), and use the flex for now. Gotta love the tax savings.

teen persuasion

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Re: Please help select health plan! HDHP/HSA or PPO fast!
« Reply #10 on: April 30, 2014, 06:54:35 AM »
Please do some research on your own, and don't just rely on the advice given here.  A quick Google search shows that the FSA limit is $2500 max per year (if your employer offers one), and that having both an HSA & FSA is rare (FSA can only be used for eye and dental, if not covered otherwise).  Max into HSA is $3300 single, $6550 family coverage.