In an effort to get more activity in this community, I’d like to start a discussion on how you evaluate which insurance plans to choose. Now, it is much simpler to do so when none of the plans you’re offered have HSA. With HSA plans and employer HSA contributions I found it’s actually quiet difficult to do all the math to...
Good discussion topic! I recently went through a similar exercise and my conclusion is that the HSA scenario financially wins in all cases as long as my OOP cost remain below 90% of the max on average. In my case both plans had low/no premiums.
There is one major caveat though: The advantage the HSA plan has comes from tax savings on the pre-tax contributions and from the tax free growth of the HSA. This only works if you do not spend any of your HSA funds and instead invest them, paying for healthcare with post tax money. Meaning you need to have 1-2x your max OOP set aside at all time to be safe.
The HSA is a very advantageous account for tax saving but I think it’s fundamentally flawed for actual healthcare costs because no one can predict what their costs will be next year.
I think a better approach is to assume your costs can be anywhere from 0 to the max OOP and see how the numbers work out for different scenarios. Then you can make a decision based on financial (not health) risk tolerance.
How to properly compare the true costs of employer health insurance plans
In an effort to get more activity in this community, I’d like to start a discussion on how you evaluate which insurance plans to choose. Now, it is much simpler to do so when none of the plans you’re offered have HSA. With HSA plans and employer HSA contributions I found it’s actually quiet difficult to do all the math to...