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HSA or double insurance coverage?

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  • HSA or double insurance coverage?

    My wife and I are in a lucky position where we both have great insurance plans. She switched to a HDHP in order for us to start saving for HSA, with me adding her as a dependent on my health plan. However, when reading about the stipulations of HSA, it says she can't be covered by a non-HDHP. My insurance via residency covers 100% everything with $0 out of pocket within the university health system. She has no chronic medical problems and is in general good health. We're debating for next year to take her off my coverage and having her solely be insured by her HDHP in order to contribute to the HSA. Would anyone recommend differently? Thanks!

  • #2
    i'm in a similar situation - wifey and i both have great health plans. what you're really asking is "should she go back to her non-HDHP? or drop her as a dependent, stay on her HDHP and start contributing to HSA", right? to know depends on how sweet her non-HDHP is.

     

    i'm a fellow finishing this year but staying with same employer. currently my premiums are paid, but next enrollment i'll have the option of switching to HDHP for the first time.

    non-HDHP: $144 monthly premium, $250 annual deductible, 80% coinsurance, annual max out of pocket $3500

    HDHP: $37 monthly premium, $1500 annual deductible, 70% coinsurance, annual max $6000, $600 employer contribution to HSA

     

    cost of catastrophic year

    non-HDHP: $1728 premiums + $3500 = $5228

    HDHP: $444 premiums + $6000 = $7944 (minus $600 employer contribution, minus $2750*0.172 effective tax rate, minus whatever future HSA benefit) = dropping it down to at least $5371

     

    "cost" of healthy year

    non-HDHP: $1728 premiums

    HDHP: $444 premiums - $600 - $2750*.172 - whatever future HSA benefit = i come out ahead at least $630

     

    somebody feel free to talk me out of it, but HDHP/HSA seems the way to go.

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    • #3
      @Tex - doesn't your policy's annual deductible count toward your annual OOP cost? If so, the cost in a bad year is roughly equal to the non-HDHP. Of course, if you are using your HSA for an extra Roth IRA (even better since deductible on the front end), you'll also have future growth to consider, assuming your employer is using a company with investment options.

      If the 2 plans are apples-to-apples, it appears that the HDHP is the better choice.
      Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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      • #4
        @Brian - as @Tex says, you have to consider the benefits of the 2 policies. Also, @Tex has provided a great template to compare the costs.
        Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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        • #5
          perfect! thanks for checking my work. i've edited my post.

          Comment


          • #6
            Thanks for your help in getting me to analyze the numbers. It looks like HDHP is the way to go.

            PPO: Yearly premium: $946, In-network Deductible $300, 90% coinsurance, In-network OOP max: $1,500

            HDHP: Yearly premium: $0, In-network Deductible $1,300, 90% coinsurance, In-network OOP max: $2,600 Employer HSA contribution: $1000

             

            It seems like in a catastrophic year, the HDHP still makes sense for my wife.

            PPO: $946 premiums + $1500 = $2,446

            HDHP: $0 premiums + $2600 - $1000 = $1,600

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            • #7
              Plus you're lowering your taxable income when you contribute to HSA! You'll have to figure it out again if you have a kiddo, or when you finish residency and your coverage changes. It might make sense for you (or kiddo) to be a dependent on her HDHP, which would increase the amount you could contribute to the HSA

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