Hi Blinders, My wife is due in March 2020 and I need to pick one of the two health plans offered by my new employer starting Feb 1st. Which one would you suggest ? Please vote. Its our first baby and plan includes only Employee + Spouse. There will be an option to change the plan after the birth as its a qualified life changing event. HDHP with HSA(High deductible, Low premium) Annual Deductible $5600 Out of pocket maximum $8000 Monthly Premium(Employee+Spouse) $450 Edit:Monthly Premium(Family) $700 Edit: Employer will contribute $50 each month into the HSA account Traditional Plan(Low deductible, high monthly premium) Annual Deductible $2000 Out of pocket maximum $6000 Monthly Premium(Employee+Spouse) $625 Edit:Monthly Premium(Family) $978
Do you expect to reach OOP maximum? If so HDHP is better.
Yes I am estimating the cost of delivery will hit the OOP maximum.
HDHP, $5400 total premiums and $8000 medical expenses from HSA. Total $13400. Traditional, $7500 total premiums and $6000 medical expenses. Total $13500. HDHP is slightly cheaper. PLUS the $8000 HSA part can be paid by pretax money.
What are your anticipated expenses and when will they occur?
It's not an employer paid health insurance? Is this typical in SV that employees pay their health insurance? My employer pays for mine. I just pay the out of pocket expenses
This certainly looks like employer-paid insurance. $450 or $650 for a family is less than half the actual cost. The employer is paying the other half.
Thanks for the clarification
Traditional plan is clearly better. If you have up to $6000/year of medical expenses, which you surely will with a baby on the way, the traditional plan will cover those expenses for less money. (Basically, the difference in the monthly premium * 12 is lower than the difference in the deductibles.) Also, HSA plans involve a lot more filing and paperwork on tracking expenses.
Agree with above based on overall cost
Yeah normally I’d vote High Deductible with HSA if you’re young and want to put money with an HSA but with a baby coming I’d go for traditional.
Neither plan is good, but traditional looks better, provided that the coverage percentages aren’t terrible. If you end up having to cover that OOP spread, then you’ll save a tiny bit with the HDHP. I personally would go with the traditional in your situation.
Is there any HSA match ? Or other incentives from Oracle? If not it Looks like the traditional plan is the best bet if your expected expense is > 4K.(Diff in payment + Deductible)
It’s not with Oracle. There is an employer contribution of $50 each month into the HSA account.
Ok, still leans in favor of traditional. Usually companies incentivize the HSA more to close the gap.
Congratulations!! Does employer offer rebate or additional money in HDHP plan? This played a major role in my decision to consider HDHP plan in the past. Here is what I would consider: Check online with the insurance provider effective cost for delivery (normal and surgery), usually insurance provider has rough cost estimate. Calculate Worst case: ( I would use family and not “employee + spouse” since for 10 months from March the cost would be different due to baby added to the plan) Cost - 12*(monthly family cost) + deductible + 80% or whatever the coverage after deductible for remaining cost until it hits out of pocket max (check insurance plan) - cash (any employer paid cash, mostly applicable only for HDHP) Similarly, calculate best case (no surgery) Do this for all the plans you are considering and also check the % coverage after hitting deductible (In above calculation i used 80% but it can be as high as 90%) so find out from the insurance plan.
Yes employer contribution of $50 each month into HSA
50$ is for family or employee only? Usually, amount will be different for single vs spouse vs family
It’s for the family.
Do either offer an FSA? It's the best tax avoidance tool when you have predictable medical expenses, at it's recognized at both federal and state levels (not all states recognize HSAs, e.g. California does not). Also keep in mind that even with the HDHP you can still contribute the full $2750 to an LPFSA which can be used as a regular FSA for any expenses beyond your deductible.
Those are two horrible choices...
I know but I have no other option.