Anyone have experience with HDHP/HSA's?

Discussion in 'The Watercooler' started by hearts and roses, Feb 20, 2010.

  1. hearts and roses

    hearts and roses Mind Reader

    My company pays 80% of our health insurance premiums, the employee pays the other 20% of the premium. We have pretty decent coverages, however, the premiums across the board have been going up an average of 10% each year.

    This year we are looking at other options and the option that my boss finds most interesting is an HDHP (High Deductible Health Plan). An HDHP has a high deductible but the overall savings in premiums for our company will be about $56,000. The deductible for a single employee is $2000 and $4000 for an employee covering family. Once the deductibles are met, the patient pays nothing out of pocket. Holy Deductible, right?!

    Since I am the HC Administrator/Human Resource person in our company, I was able to sit in on the meeting we had this past week with a new set of brokers trying to get boss to buy into this program/type of coverage.

    Eneter the HSA. The Health Savings Account (HSAs) comes into play as a separate savings account that is set up for each covered employee. The employee can take the money they save from paying a lower premium and put into this HSA to use until they meet their deductible. Likewise, the company can also use some of thier savings from paying a lower premium and deposit a designated amount of money into each employees HSA to help them meet their deductible amount.

    I am not against it, in fact it really sounds like a good plan. We will still have the same insurer and have all the same coverages. Our monthly premiums will be considerably less...I will save about $4500 annually (not up front) of my own money paying a lower premium. My boss has generally been a fair and generous employer in the past and it sounded like he was leaning towards depositing the full deductible amount per employee (amounts depending if they are single or a family, of course). One of the brokers injected that it might be more fair if he were to deposit a specific amount in each employees account and if there is a difference, the employee can make up the difference by making his/her own contributions.

    My problem is this: Currently, I can afford a copay of say, $15/25 for an office visit. Going forward, I cannot afford to plunk out upwards of $300/visit until I meet my $4000 deductible, understand? My boss turned to me during the meeting and asked me if I thought I'd ever meet the deductible...I sort of stammered because it really does depend on the year, but in RX alone, some years I've gone over $4000 in copays! His son is in rehab for crying out loud - is he that clueless still? If one of us has to have an MRI, how could we NOT meet the deductibles?

    So, in the long run, the new plan will save all of us money. In the short term, however, it may mean more out of pocket costs until we meet our deductibles and what if we never do? That means we are paying to have 'emergency only' insurance because there are some who may not reach the deductible, myself included. And let's not forget that each year is a new year, which may mean more out of pockey expenses each year. The up side is that if we don't use up all the money in the HSA, whatever is left over from the prior year will roll over. If my boss were to take some of his $56,000 in savings and put the total of deductibles into each employees HSA it amounts to $24,000, which means he will still have a significant savings of almost $32,000. After that, depending on the usage and if the employee decides to fund his/her own HSA, it may mean the company will never again have to make a contribution. But if the company doesn't fund the HSA's at all, I see the employee paying way more out of pocket expenses and having coverage for emergencies only because a hospitalization of some sort is the only time a deductible might be met - or an MRI, or extensive testing, blood work, etc.

    To me, and the broker agreed when I said it, this is like gambling that the employees will not use their health ins. coverage and may think once or twice or three times before going to see their doctor. I can envision some employees suffering until things get so bad or painful that they end up in an ER instead of just simply seeing their family physician. Or, on the other hand, waiting over a weekend to see their Dr only to be sent to the ER because their condition has worsened.

    I am meeting with boss on Monday to discuss with him the details. I think he's going with this program - I just hope he is going to fund everyone's accounts to meet the deductibles!

    Oh, I almost forgot - another perk to having an HSA is that we can use the money in there to cover any other medical need, such as aspirin, Mucinex, syringes, or dental copays, etc., as long as it's medically related.

    If you're still with me, what do you think of this? And if you have any experience with this setup, how do you like it (or not)?
  2. tiredmommy

    tiredmommy Site Moderator

    We're in our 2nd year with a HDP & HSA. It was nerve-wracking last year until the deductible was met but it turned out okay. Now... we still have $$$ in our HSA that was earned last year and we can use to pay our medical expenses until the deductible is met this year so I'm not as nervous. Plus, annual check-ups are still covered 100%. Overall, I'm pleased.
  3. witzend

    witzend Well-Known Member

    We have a Flexible Spending Account, which is similar to your HSA. We designate how much we want to set aside per year, and that amount is deducted evenly over the 26 pay checks. But we are reimbursed up to the full amount as we need it. I suppose that if husband ever left the company they would be taking it out of his last paycheck. But while we only put in something like $80 pre-tax per paycheck, if we use up our entire allotment by March, we get reimbursed the entire allotment by March. It's like an interest free pre-tax loan. So your plan would work very well for us under those circumstances.
  4. hearts and roses

    hearts and roses Mind Reader

    Yes, we can pay in pre tax through our payroll also. And if we leave the company, anything in our HSA is ours to either withdraw or we can roll it over into another HSA or into an IRA. So I would not have to worry about owing the company any money if the company finances the accounts to the full amount of the deductibles. No one at the meeting every mentioned it, but I suppose our company could 'pre-fund' the accounts and we could essentially pay back the company by having a certain amount taken out of our paychecks each period to reimburse for the deductible. Hmmm...I may have to keep that one under my hat unless boss decides not to fund the accounts. It could be a viable option that would at least mean not having to pay a large medical bill all at once but rather over time.

    Thanks for your input. I truly appreciate it.
  5. MyFriendKita

    MyFriendKita Member

    I was told with an FSA the company cannot take the money; we can ask the employee to pay it back, but we can't make them. That's why there usually is a cap on the amount an employee can contribute.
  6. crazymama30

    crazymama30 Active Member

    I have a fsa, think it is the same or similiar to an hsa. I would not be able to do the high deductible thing.

    the fsa is my lifesaver. The most you can put in here is 5,000 for a family or couple, I don't remember which. I have put the max in for 2 yrs and have always used all of it. Last year I ran out of money in July, but also had a big chunk of easy child's braces to pay for. Between the copays for therapy for difficult child and I and all husband's doctor visits and easy child's braces I don't have to worry about meeting it.

    I think some of the guidelines are determined by the employer.
  7. witzend

    witzend Well-Known Member

    Thanks, Jo - "pre-fund" is exactly the word that fits how we work it with our FSA.
  8. susiestar

    susiestar Roll With It

    One thing to consider is that a sick worker is a less productive worker. If people don't go to the doctor because this, they won't be as good at their jobs. Sick days may also go up, which is costly for the employer. Esp for employees with children.

    If the employer helps fund the deductible this would be an option I would LEAP at. Our plan now almost never has us reaching the deductible BUT all we pay is the copay for docs and drugs. We almost never pay anything for tests, durable medical equipment, etc... So copays don't go to deductible and I haven't figured out what the deductible is for. Because in 6 years everything has been paid.

    If the employer is not going to fund the deductible at least partially this would impose real hardship on many families. Most employers here will pay the employee premiums, or part of them, and family premiums are not paid for. This means that employees with families are not getting more benefits than single employees.

    This could be a very useful plan, esp the second and following years after everyone is used to it.
  9. hearts and roses

    hearts and roses Mind Reader

    I think the FSA and HSA are similar, except if we leave the company, the money is ours to take with us. My sister has an FSA and she said that if they don't use the money, each year the money is lost (goes back to the company) as they are not the contributors to the account. So, they make sure they use every dime. They even buy my mom's depends on that account.

    So, I'm taking notes on this so I am prepared for our meeting tomorrow - thanks again!
  10. tiredmommy

    tiredmommy Site Moderator

    I believe a taxpayer can have either an FSA or an HSA... not both. Just an FYI.
  11. MyFriendKita

    MyFriendKita Member

    You can have both, but:

    Also, an employee does contribute his/her own funds to an FSA through payroll deductions throughout the year; the reason you don't get back any funds not used is that the funds are contributed pretax. The company can opt to extend the deadline past the end of the year (to March) to allow people a chance to use up all of their funds.