Hello fellow Mustachians, my employer is expanding our HDHP options from one to 3 for next year, with different levels of premiums, deductibles and coverages. I am having a hard time deciding what option to pick and would appreciate some feedback from the mathematically inclined Mustachians. Thank you in advance.
I carry coverage for myself + child. My out of pocket expenses under the current HDHP plan were $2,250 in 2013, $1550 so far in 2014. I have no additional planned medical expenses for this year (barring an unexpected illness). So I'd say on average we spend $1800-2000 per year. My HSA balance will be around $13,000 by the end of 2014. I contribute the max to the HSA (including $800 contributed by my employer). 33% marginal tax rate plus 6.75% state tax.
I have the following options for 2015:
Option 1
$3,500 individual/$7,000 family deductible, $6450/$12,900 out-of-pocket max. 80/20 coinsurance after deductible. $885 annual premiums. Employer does not contribute to HSA.
Option 2
$2,500 individual/$5,000 family deductible, $5,000/$10,000 out-of-pocket max. 80/20 coinsurance after deductible. $1922 annual premiums. Employer contributes $800 to HSA.
Option 3
$1,500/$3,000 family deductible, $4,000/$8,000 out-of-pocket max. 90/10 coinsurance after deductible. $2960 annual premiums. Employer contributes $800 to HSA.
The entire family deductible must be met before co-insurance applies. After a family member reaches the individual out-of-pocket max (includes the deductible), insurance covers 100% for that person, and remaining family members continue to pay 20% co-insurance until the family out-of-pocket max is met.
Which option would you choose in my situation and why?