Employer Switching to HSA

[GMFan]

My employer is switching our healthcare coverage to a Healthcare Savings Account (HSA) because our current healthcare plan has gotten crazy expensive.

Basically, my employer is going to give us a $1,200 debit cards to be used on medical expenses each year. With this new plan my monthly insurance cost will go down by $125/month from my paychecks however any amount of healthcare cost over $1,200/yr will be out of my pocket. However, once the medical costs go over $5,000/yr I will be fully covered by insurance. Basically, my max out of pocket/yr would be $3,800 worst case. ($5,000 - $1,200 debit card).

I can also elect to contribute to an HSA on top of the cost/month which is basically a slush fund controlled by another debit card for when/if I go over the $1,200/year and any contribution made is tax deductible. Early withdrawal from the HSA is a 20% penalty. It can only be applied to healthcare. The HSA can be carried over from year to year and at age 65 if there is any money I can withdraw and pay tax on it like a 401k.

I am not sure how I feel about this. I mean simple blood work can cost $1,000 alone. The plan is a littler cheaper however at higher risk.

Does anyone else have an HSA plan? If so how do you feel about it?

For the record the company I work for currently has 11 full-time employees.

 

[jimbrewer]

"bloodwork"? What is this "bloodwork" of which you speak?

 

[sxg6]

I pay for all my own bloodwork out of pocket and while it does add up, the simple tests aren't all that expensive (through a doctor: comprehensive metabolic panel around $46, complete blood count w/differential $37, lipid profile $93). There are places online that allow you to order your own bloodwork at a fraction of the cost of what you'd pay through a doctor. Bloodwork aside, I do understand your overall point though.

 

[JTK]

Yep, my employer started with an HSA option in mid 2012, coupled with a high deductible health care plan. It's administered by Fidelity. HCP is through BCBS.

My employer sweetened the pot by giving us ~$1200 towards it, and you can contribute per paycheck up to the allowable limit. What the turds failed to mention to us, is it wasn't $1200 all at once, like our older healthcare spending accounts. It's in installments.

With the Fidelity HSA, you can't invest the money anywhere until you reach a minimum accnt balance of ~$2500.

Joel

 

[Drew99GT]

I have one. Mine also include 4 doctor visits per year with a small co pay. It's obviously not as good as a full group policy or better yet, a government policy, but it's saved me from financial ruin twice already. Just keep adding a small bit a month to the HSA fund so when/if you need to use the policy, the deductible won't be such a big hit.

With the healthcare reform act, high deductible/HSA plans are becoming more common.

 

[Pablo]

I actually feel pretty good about mine. Our company gives us a yearly cash deposit of $1200 as well.

What I really like is I max my HSA out (just like my 401K) PLUS it has an old guy catch up catch up clause (like the 401K). And the money is yours and not taxed after retirement when you use it for health care. Last year I even invested a little in PFO.

 

[JHZR2]

I've used an HDHP for years. It's about half the premium of a regular plan.

I think it's great. Insurance is for catastrophic/major expenses, not junior has an earache. This embodies it.


I can't say enough good.

Aetna gives me cash each month as everyone has mentioned, into my hsa. I put pretax money into my HSA (no income limit fortunately for this), and it is mine to keep, you don't have a use or lose like an FSA.

Once I hit a dollar threshold in payments for my family plan, Aetna covers 90%.

Everything gets billed to Aetna, so I get an insurance negotiated rare, not some obscene "cash" rate.

Though someone will get offended by this, I'll say it anyway. Not having $3800 in savings is irresponsible. Being able to fund the HSA with pretax money makes it easy to save what you need. You can start by just taking the amount equivalent to last year's premium out of your check. Since you said this HDHP is about half, you should have hundreds more per pay period/month. That equates to thousand(s) in a year. Then you're set.

Look at it as a zero sum game with your old policy. Don't "find" the coat delta, at least not at first, and spend it on widgets. Save it to cover your deductible and then youre set.

We just went through the whole pregnancy/baby thing this year and it was easy. It would have stunk a bit more of conception to birth didn't fall in one year, for obvious reasons, but that just is what it is and would have been no different with coinsurance, copays, or deductibles on other plans....

Originally Posted By: Drew99GT
It's obviously not as good as ... better yet, a government policy,


Based upon what? My HDHP is a government policy and sounds identical to everyone elses'.

 

[GROUCHO MARX]

Where do prescriptions fit in?

 

[JHZR2]

Originally Posted By: GROUCHO MARX
Where do prescriptions fit in?


Iirc, they count against your deductible, and fte pharmacy has a negotiated rate with insurance for pricing. If I had prescriptions to take continually, I believe the Aetna pharmacy would fill by mail at a better price.

 

[dparm]

My brother has one of these and has been screwed by it several times. He is what I would characterize as a young & healthy person but had one minor incident that stuck him with several thousand dollars of medical bills. It was some sort of abscess that formed in his throat out of the blue (weird infection or something).

It basically fell into that weird window you describe.

 

[Drew99GT]

Originally Posted By: JHZR2
I've used an HDHP for years. It's about half the premium of a regular plan.

I think it's great. Insurance is for catastrophic/major expenses, not junior has an earache. This embodies it.


I can't say enough good.

Aetna gives me cash each month as everyone has mentioned, into my hsa. I put pretax money into my HSA (no income limit fortunately for this), and it is mine to keep, you don't have a use or lose like an FSA.

Once I hit a dollar threshold in payments for my family plan, Aetna covers 90%.

Everything gets billed to Aetna, so I get an insurance negotiated rare, not some obscene "cash" rate.

Though someone will get offended by this, I'll say it anyway. Not having $3800 in savings is irresponsible. Being able to fund the HSA with pretax money makes it easy to save what you need. You can start by just taking the amount equivalent to last year's premium out of your check. Since you said this HDHP is about half, you should have hundreds more per pay period/month. That equates to thousand(s) in a year. Then you're set.

Look at it as a zero sum game with your old policy. Don't "find" the coat delta, at least not at first, and spend it on widgets. Save it to cover your deductible and then youre set.

We just went through the whole pregnancy/baby thing this year and it was easy. It would have stunk a bit more of conception to birth didn't fall in one year, for obvious reasons, but that just is what it is and would have been no different with coinsurance, copays, or deductibles on other plans....

Originally Posted By: Drew99GT
It's obviously not as good as ... better yet, a government policy,


Based upon what? My HDHP is a government policy and sounds identical to everyone elses'.


Lower premiums. I've seen enough tax returns to know what people pay. In CO, Federal Aetna HDHP plans have premiums of around $90 bucks. I pay over twice that for my policy and it has much less coverage.

 

[JHZR2]

Originally Posted By: Drew99GT
Originally Posted By: JHZR2
Based upon what? My HDHP is a government policy and sounds identical to everyone elses'.


Lower premiums. I've seen enough tax returns to know what people pay. In CO, Federal Aetna HDHP plans have premiums of around $90 bucks. I pay over twice that for my policy and it has much less coverage.





How much of that has to do with the size of your insured pool? The way this stuff is costed by "group" is ridiculous.

The OP's plan sounds just like mine, not sure what deal yours gives that has so much less coverage for more money... And you need to compare the total premium (employer and employee payment).

And for as "cadillac" as you want to make it sound, the subsidy of that and retirement benefits (I dont have a true pension) doesnt make up for the amount of income I would be making (actual offer based) in academia and the private sector if I reversed roles. But I love what I do and who I do it for (the warfighter) so Im not inclined to change despite more riches in the private sector. It isnt all roses in govt land...

 

[JHZR2]

Originally Posted By: dparm
My brother has one of these and has been screwed by it several times. He is what I would characterize as a young & healthy person but had one minor incident that stuck him with several thousand dollars of medical bills. It was some sort of abscess that formed in his throat out of the blue (weird infection or something).

It basically fell into that weird window you describe.


Im not sure I follow that. The deductible and coinsurance payments are known from the plan literature. There is a threshold of $x in deductible before the plan pays 90%, and then $y before the plan pays 100%. So the out of pocket is known.

If you have a $10k bill, you would pay $5500 because you pay the $5k deductible and then 10% after that. I suppose a regular plan would have lower out of pocket at the time, but if the premium is 2x more money (or more) the actual out of pocket may well be the same, especially if claims are seldom because of the insured being young and healthy.

It is a different way to think about insurance, and it does require more planning, but IMO it is more inline with what insurance should be.

 

[Boczech]

My wife was diagnosed with stage IV cancer after they did an emergency surgery to repair a bleeding ulcer. She was in the hospital for 16 days and that came out to nearly $500,000.00 The treatment she has been going to specializes in treating cancer and cost approx. 300k. Enjoy your health while you can and try to take extra care of yourself. She was 45yo when she first got diagnosed and still with us today thanks to some old time recipes and it is not her time to go. )

Bo

Originally Posted By: dparm
My brother has one of these and has been screwed by it several times. He is what I would characterize as a young & healthy person but had one minor incident that stuck him with several thousand dollars of medical bills. It was some sort of abscess that formed in his throat out of the blue (weird infection or something).

It basically fell into that weird window you describe.

 

[JHZR2]

Originally Posted By: Boczech
My wife was diagnosed with stage IV cancer after they did an emergency surgery to repair a bleeding ulcer. She was in the hospital for 16 days and that came out to nearly $500,000.00 The treatment she has been going to specializes in treating cancer and cost approx. 300k. Enjoy your health while you can and try to take extra care of yourself. She was 45yo when she first got diagnosed and still with us today thanks to some old time recipes and it is not her time to go. )



Wow. So glad to hear that she is with us, but so sorry to hear of her troubles. I am interested to hear of these old time recipes...

 

[MolaKule]

Wait a Minute. Our King and Saviour stated emphatically that health care costs would go down for everyone.

What am I missing?

I have had two Sister's in Laws die from cancer a year apart over five years ago and the Hosp bills were tremendous. The husbands had to pay $5k total out of pocket for each case.

 

[daves87rs]

How does HSA work with health check ups?

 

[jorton]

Lab tests for preventative care are paid 100% under my Wife's Individual HSA plan. This feature is required by law, don't know if that's a federal or state law. And after the $3500 deductible is met the plan pays %100 including perscriptions. Monthly premium is $195 and the name of the company is Blue Cross. Name of the plan is Blue Edge.

 

[Mr Nice]

I hope she is doing much better.

I worked in healthcare for 10 years and I know just how crazy expensive everything is when it comes to hospital billing as I had to deal with various CFO's and COO's.

Best advice... avoid the hospital if you can.

 

[SuperDave456]

Both the previous company that I worked for and my insurance that I cover for my wife and I have the same coverage.

First $7000 comes out of our pocket.

It's pretty much catastrophic insurance. If someone is in a terrible accident or something tragic happens $7000 each will be spent in a few hours in a ICU.

I used to work for a huge company and had awesome coverage.
Boy how times have changed.