Author Topic: Worth switching to HDHP to get HSA?  (Read 1797 times)

FLBiker

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Worth switching to HDHP to get HSA?
« on: October 14, 2015, 07:54:53 AM »
My wife and I have good health insurance available to us through work, and we get it cheap.  We both work at a large state university, so we pay $15 each per month as part of a spouse plan to get insurance for our family (us + 1 kid).  This is a standard HMO -- no deductible, $20 co-pay for regular visits, $40 for specialists (no need for referrals), free annual physical / healthy kid stuff, etc.  When we had our daughter, I think we paid $250 for the whole thing, including all the pre-natal visits.

To round out the picture, we also both have access to 403b and 457.  Right now, we max both TIRAs, 403bs and my 457.  My wife is going on unpaid leave next year, so that will change.  I'm hoping to keep maxing out my 457, with something left over for TIRA (and maybe 403b).  When she comes back, I'll switch it to max out both 457s, TIRAs and do the rest in our 403bs.  This past year, we finally got some decent 457 options.

Because of that, we've never looked at HSAs.  Open enrollment is coming up, though, so theoretically we could switch to a HDHP (both HMO and PPO are available) and start an HSA.  I'm right that this would be a dumb thing to do, though, right?  In other words, we're better off keeping the no deductible insurance, even though it makes us ineligible for HSA.

Thanks for your input.  This feels like a really dumb question, but I see so many posts raving about HSAs that I figured I'd ask.

EDIT: I just looked at the site, and it looks like the state contributes "up to" $1000 for a family HSA -- can't find what determines the "up to" factor.
« Last Edit: October 14, 2015, 07:58:54 AM by FLBiker »

seattlecyclone

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Re: Worth switching to HDHP to get HSA?
« Reply #1 on: October 14, 2015, 08:04:49 AM »
How much do the premiums differ (if at all) between the two plans? How much do you visit the doctor in a typical year? These are important questions for making the decision. If the monthly cost for the plans is the same, and you tend to go to the doctor a lot, you may be right that the low-deductible plan is better. If the HDHP is cheaper and you are pretty healthy, it may be the better choice.

FLBiker

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Re: Worth switching to HDHP to get HSA?
« Reply #2 on: October 14, 2015, 08:20:56 AM »
Thanks!  Because we're in the spouse program, I actually thing the premiums would be the same.  And I we don't go to the doctor a lot, but I do get asthma meds.  I figured it wouldn't be worth it, I just wanted to see if I was missing something.

terran

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Re: Worth switching to HDHP to get HSA?
« Reply #3 on: October 14, 2015, 08:27:09 AM »
No way would I do this. We're on an HSA plan because it saves us about $3000 in premiums and we don't regularly use much healthcare, but if you get no (or minimal) premium savings then you're just signing up for a minimum deductible of $2300 for a family plan (IRS minimum to be considered HSA eligible) for the privilege of having access to an HSA when you're not maxing out other tax advantaged space anyway. I say enjoy the excellent health insurance coverage!

sonjak

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Re: Worth switching to HDHP to get HSA?
« Reply #4 on: October 14, 2015, 08:33:19 AM »
As others said, the only reason to do it would be for premium savings and/or if the company contributes enough to HSA to make it worth it.  I chose the CDHP because it's a premium decrease (about half) AND the company contributes some to HSA.  Since I don't use my benefits much it all goes towards savings and helps me max my HSA with less input from me.

Might be worth digging a little more into what "up to" means.

Bob W

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Re: Worth switching to HDHP to get HSA?
« Reply #5 on: October 14, 2015, 08:36:29 AM »
You realize that your insurance is super gold plated, government issued and that you are paying virtually nothing for it, right?

I would stick with it.  It can't go on forever of course.  Your health insurance benefits are probably around 20K per year. 

My wife is a state employee with moderately decent insurance but she still complains as it is costing her around 2K some years.   I pointed out that the state was paying 10K for her coverage.    She didn't even realize how expensive health insurance is. 

FLBiker

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Re: Worth switching to HDHP to get HSA?
« Reply #6 on: October 14, 2015, 08:47:58 AM »
You realize that your insurance is super gold plated, government issued and that you are paying virtually nothing for it, right?

I would stick with it.  It can't go on forever of course.  Your health insurance benefits are probably around 20K per year. 

Nice way to look at it, thanks!  Guess that means I should probably stop complaining about my dental...