2.18.2009

Health Savings Account

Recently, my company made available an entire smorgasbord of health-care plans for its employees. While this may sound like a good thing, it was really just a way to increase our health care premiums.

True to our suspicions, the regular PPO 90/10 and 80/20 plans doubled in price. In addition, they offered a new plan called a high deductible plan. Basically this plan has zero monthly premiums (the company pays the fees) and you pay the entire fee when receiving medical care. Luckily, there are contracted rates so you won't end up paying $175 dollars for a 10 minute appointment. Just kidding...you still will. That's the contracted rate. Leeches.

Right away, we thought this was a joke. A plan that costs the company little money, and puts the employee footing the entire bill? Do I work for the government?
Interestingly enough, it actually ends up being very cost-competitive with the other plans.
Your total deductible is just over a couple thousand dollars. After this is met, you go onto a 80/20 plan.

If you were to enroll in the 80/20 plan up front, you would pay a couple thousand dollars in premiums even if you took zero benefits for the year.
Another advantage in the high deductible plan is that you can choose to purchase your prescriptions wherever you choose. So, if I can find Viagra much cheaper from a guy named Paco who sells them out of the back of his Cabriolet, then I'll do it there rather than heading over to Walgreen's.

So what to do with all this leftover money that you would have paid to insurance premiums?
Hookers? A riding lawnmower? Give it to Obama?

Contribute to a Health Savings Account duh. (HSA)

Basically a HSA is a savings account in which you contribute tax-free dollars. (similar to a flex spending account) This account can be used to pay for virtually everything medical related. In addition, it is your permanent account. It carries over from year to year, regardless of which company you work for. Did I mention that it also collects interest? Bitchin! Tax-free Robitussin??!! Double-bitchin!!


Let's take a couple real-world examples which would show the benefit of this plan.

Suppose you contribute a couple thousand dollars to your HSA in a calendar year, but don't incur very high medical expenses. Let's say you only incurred 500 dollars of medical expenses for a voluntary 4-knuckle prostate exam. You would have 1500 dollars the next year for medical expenses.
If you continued to contribute a couple thousand dollars the next year, you'd have enough for Lasic, or to remove those unsightly bunions.

Alternatively, let's say you have a major surgery during the year. You would end up draining your HSA, and then after you met your deductible, you would move automatically over to the 80/20 plan.

I kind of like to look at my current health care plan as a hand of blackjack. I am sitting on a pair of Aces, and I'm going to split my hand with the dealer showing a 6. The odds are pretty good that I'll walk away with some money, but you never know if the dealer will throw you a 7 and a 6, and work his way to a 20 on 4 cards.

HSA's get a money-saving 4 stars out of 5.

2 comments:

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