Health Insurance question

blondie42107 · December 2015

My friend recently informed me of a job opening that I'm highly qualified for. We were chatting about the benefits. Currently we have our insurance through my H because his are much better than my employer offers. We do have to pay an annual spousal surcharge of $1000.00 (this is taken out of H's salary semi-monthly, in addition to the employee premium portion). His coverage is much better than mine and the surcharge is cheaper than what I would have to pay for my employer coverage.

So with this new job option, they have three health insurance plan. My friend stated they take the high deductible plan because it includes a HSA with rollover benefits. She also stated that if she leaves her current job, her HSA goes with her. The family deductible is $2500.00 (medical, dental and vision) and the plan premium is paid by the employer 100%. The employer also funds $2500.00 into the HSA each year. My friend said that this has been a really good option for her family of four. She's been employed there for 7 years and her current HSA balance is $10,000.

Anyone have experience with this type of plan? I don't have details of coverage after the deductible is met but we have a current medical only family deductible of $700 and we rarely reach that! I think the only two years we did, were when I was pregnant. Our current vision and dental are separate. H is going to log on to his benefits page to see exactly how much we are paying annually for family coverage for medical, dental and vision. We're thinking that if I get this job it could really save us a lot of money health insurance wise plus it would be full time verses my part time schedule and better pay! Plus it's a shorter commute!

AprilZ81 · December 2015

That's awesome! Your new employer would pick up the tab for the premiums for both you and your husband?

blondie42107 · December 2015

AprilZ81 said:
That's awesome! Your new employer would pick up the tab for the premiums for both you and your husband?

Yes. My friend said the employer pays premium for all covered. She has family coverage and pays nothing towards the premium. I also thought it was great that they fund a HSA to equal the deductible!

simplyelise · December 2015

Sounds like a great plan. I think the only other info I would want to know would be the out of pocket max and the coinsurance after deductible. But even if those aren't awesome, it sounds like you'd come out waaaaaay ahead.

Good luck with the application process.

blondie42107 · December 2015

simplyelise said:

Sounds like a great plan. I think the only other info I would want to know would be the out of pocket max and the coinsurance after deductible. But even if those aren't awesome, it sounds like you'd come out waaaaaay ahead.

Good luck with the application process.

Thanks! My friend used to work where I am currently. We've always done similar work so we know what each other does but we wouldn't be working side by side. They employer is expanding and she said they have a low turnover. She just sent me a message with some of the other benefits and they sound really good too. They will officially be posting Sunday/Monday but she already told HR that she knew someone who would be a good fit and they told her to have me send in my cover letter and resume. I put it in the mail this morning.

dragonstarjk · December 2015

This sounds like a really fantastic plan. I have an HSA through my work--it's not quite as fabulous but it could give you some insight into how it works.

Typically, with an HSA, there is no coinsurance/copay. You pay 100% of costs out of your HSA until you meet your deductible/OOP max. Then the insurance pays everything over and above that. It works out really well if you have very little expenses, because even paying 100% you will typically end up paying less than you would pay in premiums.

You take your HSA with you because it is a savings account governed by the IRS (like an IRA). So those funds are yours, and there is a tax deduction for contribution--although, in this case, your employer would get the deduction, not you. You could still contribute additional funds to the HSA up to the annual limit--I think it's $4500 or something close to that for a family HSA but you'd want to check the IRS rules to make sure.

HSAs can be used to pay for a lot of things that other insurance doesn't pay for. Example--my old insurance didn't pay for orthodontics, but HSA funds can be used to pay for those.

I think HSAs are great for people that don't have a lot of recurring healthcare expenses, and can be treated like an additional retirement account. You can continue using your HSA for health-related expenses even after you don't work there and/or are retired, and once you turn 65 you can use the funds for ANY reason without tax consequences.

hoffse · December 2015

I have an HSA and love it. I've been funding for a couple years and currently have about $6200 in it. It ought to be right at $10K by the time we are having kids.

If you typically don't consume much healthcare, it's a fantastic option. I go to my lady doctor once a year and H gets a physical once a year. Those two visits are free under our plans. I also go to the dermatologist once a year to monitor some moles. That visit is $130.

With my high deductible plan, my cost for birth control also counts toward the deductible. I have a very expensive kind (around $110/month). For the last 6 months or so I've just gotten samples from my physician for free, but whenever I have to pay for it, it does count toward the annual deductible. Check that with yours, but I imagine it would operate the same way.

Altogether our healthcare costs have been predictable enough that we've never touched the HSA money. TBH I'm not even inclined to touch the money when we have kids, because we would have enough warning to save for that out of pocket.

A couple other points. First, your HSA funds can be used to pay for medical costs for yourself, your spouse, and any dependents, even after you have left that employer and taken it with you. That makes it very flexible.

Also, for 2016 the max family contribution to an HSA is going to be $6,750. It's twice as much as us singletons get, and it usually goes up by $50-$100 per year. If you can afford it, take advantage of that and max it out. It's very likely that either you or your spouse will be consuming a lot of healthcare at some point in life, either because of declining health or aging. An HSA is one of the very few places where the IRS lets you double dip - you get a deduction in your contribution year AND any invested funds grow tax-free, as long as they are ultimately used for healthcare. And unlike retirement accounts, there isn't a penalty if you use those funds before retirement age, so long as they are for qualified healthcare expenses. It's like the trifecta of everything you could really want out of a tax-advantaged account.

H and I try to leverage the tax aspects of my HSA. I max out contributions each year for the deduction (I'm on a single plan). We keep enough liquid to cover both of our annual deductibles in case we have a medical emergency, but we invest everything over that to work on tax-free growth.

hoffse · December 2015

Another point I forgot to mention - one really cool thing about HSAs is they can be used to reimburse your out-of-pocket costs for healthcare at any time after that cost has been incurred.... even years later.

In other words, let's say H and I spend $4,000 having a baby. We had 9 months' notice, so we saved that amount and paid of out pocket. I can claim reimbursement from my HSA right after paying, or I can wait 20 years and claim it then - I just need the receipt. And actually, my HSA account has a receipt vault where they will hold digital copies of receipts for you, even if you haven't claimed reimbursement yet.

H and I spend very little out of pocket for healthcare, but we always submit our receipts to the HSA vault. We have generated about $1,200 worth of "credit" in my HSA over the last couple of years, based on things like my dermatologist visits and my prescription. If we are ever truly in a financial bind, I can claim that $1,200 back at any time. So that is really another angle of our e-fund.

blondie42107 · December 2015

@hoffse
Thanks! Helpful information! I didn't know all of that!

I've decided to apply for the position. We played with the numbers and we could save quite a bit by utilizing that health insurance plan verses what H's employer offers.

Plus it would be a pay raise for me (friend gave a general pay range based on info she recently heard), full time verses the part time I have now, and auto 7% 401K employer contribution (even if the employee contributes 0%). They also have more paid holidays than I currently get and sick/vacation is pretty good!

They do offer two other health insurance plans so if offered the job, we'd have to do more comparing.

hoffse · December 2015

It sounds like this job would be fantastic if you get it - lots of awesome benefits. Good luck!

When I read about HSA's, lots of articles fail to mention the tax double-dip or they don't describe it in those terms. I have no idea why, because that's SERIOUS money, and the IRS almost never lets it happen. I think more people would sign up for HSAs if they realized what a sweet deal it can be.

I've always dreamed of double-dipping the retirement accounts... if we could do that, we would really be rolling! I actually get a little upset when I think about it, lol.

short+sassy · December 2015

The downside of an HSA plan is you do have to pay for EVERYTHING out of pocket until you hit the yearly deductible. For example, even all doctor visits and prescriptions (with the exception of an annual wellness check, those are covered 100%).

With that said, I do have substantial medical (yearly) and prescription costs (monthly), but I still chose the HSA plan at my work. In my case, I'd normally be better off with traditional insurance...except my employer covers the entire premium for the HSA, whereas I'd have to pay $300/month for the traditional plan. So, once that is factored in, I'm better off with HSA.

Everyone has covered that money in your HSA account rolls over from year to year and stays with you, but they are also part of your estate. If you pass away, regardless of your age, your heirs also

blondie42107 · December 2015

short+sassy said:
The downside of an HSA plan is you do have to pay for EVERYTHING out of pocket until you hit the yearly deductible. For example, even all doctor visits and prescriptions (with the exception of an annual wellness check, those are covered 100%).
With that said, I do have substantial medical (yearly) and prescription costs (monthly), but I still chose the HSA plan at my work. In my case, I'd normally be better off with traditional insurance...except my employer covers the entire premium for the HSA, whereas I'd have to pay $300/month for the traditional plan. So, once that is factored in, I'm better off with HSA.
Everyone has covered that money in your HSA account rolls over from year to year and stays with you, but they are also part of your estate. If you pass away, regardless of your age, your heirs also

Thanks!

If I'm offered the position, I'll still look into the other two insurance options. The high deductible plan with HSA seems like a great choice given the employer covers 100% of the premium and funds the family deductible of $2500 into the HSA.

I've only ever had traditional health insurance options and flex spending accounts so this is new to me.

short+sassy · December 2015

blondie42107 said:

The downside of an HSA plan is you do have to pay for EVERYTHING out of pocket until you hit the yearly deductible. For example, even all doctor visits and prescriptions (with the exception of an annual wellness check, those are covered 100%).
With that said, I do have substantial medical (yearly) and prescription costs (monthly), but I still chose the HSA plan at my work. In my case, I'd normally be better off with traditional insurance...except my employer covers the entire premium for the HSA, whereas I'd have to pay $300/month for the traditional plan. So, once that is factored in, I'm better off with HSA.
Everyone has covered that money in your HSA account rolls over from year to year and stays with you, but they are also part of your estate. If you pass away, regardless of your age, your heirs also
Thanks! If I'm offered the position, I'll still look into the other two insurance options. The high deductible plan with HSA seems like a great choice given the employer covers 100% of the premium and funds the family deductible of $2500 into the HSA. I've only ever had traditional health insurance options and flex spending accounts so this is new to me.

Yeah, that is seriously awesome right there. My current employer doesn't add anything to my HSA, but I max out my contribution every year. I make in the mid $40s at this job and save about $200 in taxes every month with a maxed out contribution.

HSA accounts also usually come with a VISA or M/C debit card. So, when I do need to visit the doctor/dentist or need to fill a prescription, I just pay with that card. They make it really easy.

Good luck with your application for the potential new job! Keep us updated.

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