Comments on: The biggest HSA myth http://www.hrbenefitsalert.com/the-biggest-hsa-myth/ Daily dose of benefits news and know-how Sat, 18 Jun 2011 21:36:33 +0000 hourly 1 http://wordpress.org/?v=abc By: David http://www.hrbenefitsalert.com/the-biggest-hsa-myth/comment-page-1/#comment-826 David Thu, 18 Sep 2008 15:24:59 +0000 http://www.hrbenefitsalert.com/?p=142#comment-826 When comparing HSA qualified plans with non-HSA qualified plans, don't forget to look at the big picture, including the fact that you can fund your deductible with pre-tax dollars! Although your premium might be greater, this savings may more than offset that difference. Plus, you can grow that money by investing it, although there is risk involved. Once you reach the eligible age, you can even take a distribution without penalty. My point here is that a careful analysis includes more than looking at deductible amounts and premiums. When comparing HSA qualified plans with non-HSA qualified plans, don’t forget to look at the big picture, including the fact that you can fund your deductible with pre-tax dollars! Although your premium might be greater, this savings may more than offset that difference. Plus, you can grow that money by investing it, although there is risk involved. Once you reach the eligible age, you can even take a distribution without penalty. My point here is that a careful analysis includes more than looking at deductible amounts and premiums.

]]> By: Scott Borden http://www.hrbenefitsalert.com/the-biggest-hsa-myth/comment-page-1/#comment-116 Scott Borden Fri, 23 May 2008 02:00:55 +0000 http://www.hrbenefitsalert.com/?p=142#comment-116 You are correct! When comparing similar deductibles you don't always find the significant premium savings that HSAs are supposed to deliver. Typically this is because the deductible is only one of the moving parts. I like to talk "out-of-pocket maximum". This term includes not only the deductible but also the co-insurance (the 80/20 part) and co-pays. Most insurance companies do not include co-pays when they calculate your "out-of-pocket maximum" (see http://hsaguy.wordpress.com/2008/05/01/do-co-pays-really-make-sense/). If a fair comparison of "out-of-pocket maximum" happens, there is usually one of 2 findings: 1. The HSA qualified plan is offering a lower "out-of-pocket maximum" for a similar price 2. If the "out-of-pocket maximum" is similar, the HSA qualified plan costs less. Although co-pays have risen sharply (remember $5 generic, $7 name brand?), there is still some cost to the insurance company for co-pays. One insurance executive told me overall the co-pay portion covers 80% on average with the insurance company responsibility being the remaining 20% of the bill. If a co-pay based plan has a similar "out-of-pocket maximum", it should cost more. Of course each insurance company seems to price their HSA qualified plans significantly different. If you aren't finding the premium savings you expected, you might need to find another independent insurance broker that specializes in HSAs and is willing to look at all the insurance companies. You are correct!

When comparing similar deductibles you don’t always find the significant premium savings that HSAs are supposed to deliver. Typically this is because the deductible is only one of the moving parts. I like to talk “out-of-pocket maximum”. This term includes not only the deductible but also the co-insurance (the 80/20 part) and co-pays. Most insurance companies do not include co-pays when they calculate your “out-of-pocket maximum” (see http://hsaguy.wordpress.com/2008/05/01/do-co-pays-really-make-sense/).

If a fair comparison of “out-of-pocket maximum” happens, there is usually one of 2 findings:

1. The HSA qualified plan is offering a lower “out-of-pocket maximum” for a similar price

2. If the “out-of-pocket maximum” is similar, the HSA qualified plan costs less.

Although co-pays have risen sharply (remember $5 generic, $7 name brand?), there is still some cost to the insurance company for co-pays. One insurance executive told me overall the co-pay portion covers 80% on average with the insurance company responsibility being the remaining 20% of the bill. If a co-pay based plan has a similar “out-of-pocket maximum”, it should cost more.

Of course each insurance company seems to price their HSA qualified plans significantly different.

If you aren’t finding the premium savings you expected, you might need to find another independent insurance broker that specializes in HSAs and is willing to look at all the insurance companies.

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