Hi Money Minder,
So, got myself a shiny new job. And now I’m staring at the employee health plans like a deer in the headlights. They’ve got two PPO options – one with a high deductible (but low premium) and an HSA, and the other with a lower deductible (but higher premium) and FSA eligibility.
A little background on me: I’m taking care of the fam, with a little one we welcomed last year. Don’t really have plans for another kiddo anytime soon, but hey, life happens. My wife and I both have monthly prescriptions to pick up, and she’s seeing a therapist weekly for now, but might cut back to less frequent visits down the line.
My baseline salary is $93k (hooray for bonuses not included).
Now for the nitty-gritty on these plans:
| Plan Features | BCBS $1,500 PPO | BCBS HSA PPO Max |
|---|---|---|
| Annual Deductible Individual/Family | $1,500 / $1,500 per person up to $4,500 | $3,400 / $3,400 per person up to $6,750 |
| Annual Out-of-Pocket Maximum Individual/Family | $4,000 / $4,000 per person up to $12,000 | $4,700 / $4,700 per person up to $10,500 |
| HSA Contribution Individual/Family | N/A | $350 / $700 |
| Preventive Care Visit | Covered in full | Covered in full |
| Primary Care Visit | $40 co-pay | 20% after deductible |
| Specialist Visit | $70 co-pay | 20% after deductible |
| Emergency Care | 20% after deductible | 20% after deductible |
| Urgent Care | 20% after deductible | 20% after deductible |
| Inpatient/Outpatient Services | 20% after deductible | 20% after deductible |
| Prescriptions: | 10/40/70/90 | 20% after deductible |
Monthly cost for the fam:
BCBS $1,500 PPO = $748
BCBS HSA PPO Max = $232
That’s a whopping $516 difference per month!
My lovely benefits team has a cost calculator to help out, and based on my input, here are the yearly totals:
BCBS $1,500 PPO = $17,706
BCBS HSA PPO Max = $8,991
These numbers assume I’m maxing out my HSA. It might end up costing me the same as the low deductible plan, but with extra tax savings and the potential to invest and roll over that HSA in the future.
Oh, and I’m 36 and haven’t played the HSA game yet. Feeling pretty fit, but you never know what the munchkin might throw at us.
Any pearls of wisdom you could drop would be awesome. Thanks a ton!
Later,
Money Minder Fan
Response from THE MONEY MINDER:
Hello There,
Congratulations on the new job! It’s great to see you taking proactive steps to consider your family’s health plan options. Given your current family situation and health needs, it’s essential to weigh the pros and cons of each plan carefully.
Based on the breakdown you provided, the high deductible plan with an HSA seems like a more cost-effective option in the long run. The lower monthly premium coupled with potential tax savings and investment opportunities through the HSA make it an attractive choice. Considering your baseline salary and family’s current health needs, this plan could offer financial flexibility while providing adequate coverage for your family.
However, it’s crucial to consider potential out-of-pocket costs with the high deductible plan, especially with a child in the mix. While you mention being healthier than ever, unexpected health issues can arise, and it’s essential to have a safety net in place. The lower deductible plan might provide more peace of mind in terms of immediate out-of-pocket expenses, especially with regular therapy sessions and recurring prescriptions.
I would recommend using the cost calculator provided by your benefits team to input different scenarios based on your family’s health needs and potential expenses. This will give you a clearer picture of the total costs associated with each plan and help you make an informed decision.
In the end, it’s about finding a balance between cost savings, coverage, and potential risks. Considering your age, family situation, and financial goals, choose a plan that aligns with your current needs while also allowing for future growth and flexibility. Remember, health insurance is an important investment in your family’s well-being, so choose the plan that best fits your unique situation.
Congratulations again on the new job, and I wish you all the best in making this important decision.
Farewell from THE MONEY MINDER.
