health care question

[RedFury]

So, the wife has to choose health care coverage now that she's been at Wal-mart long enough and we are having a hard time understanding the choices.

We plan on using the "freedom" plan that allows us to start a HSA ( health savings account ), which is very important to me to get rolling. I have had a FSA ( flexible spending account ) with MY job, but its a use it or lose it deal, and I hate the idea of having to get reimbursed for something if I can avoid it altogether. It's a PITA honestly. My shop is too weak to get the FSA card so I can just use it when I need it because it'll cost a couple of cents per usage. Better that than losing hundreds of dollars because I lost my paperwork

Anyway, what we are having a time of trying to grasp is deductibles. We can choose 2500 or 6000 per year deductible, and it automatically comes with a 10,000 max out of pocket expense. The difference is $25 or $60/week for the two deductibles. We rarely go to the doctor, but are horrible at paying medical bills on time. It's a Blue Cross plan as far as I know, and Delta Dental for the piano keys.

Unfortunately, Wally World has poor Human Resources resources, so she really can't go talk to anyone about this ( according to her ), so I turn to the trusted members here to give me guidance. We have to choose on an option soon, or we will have to wait until Sept. to choose again.

[Steve R Jones]

If you never get ill or have a serious accident, the lower weekly payment/higher deductible is better...But if for example you found out the little Mrs is three months pregnant, the lower weekly payment plan would cost you $3500 more out of pocket....

[Gomer]

The deductible with an HSA is the amount you have to pay out of pocket (tax free) before you receive any coverage at all. The $10,000 is your total exposure before everything is covered.

With the $2,500 deductible, you had better have $2,500 on hand. With the $6,000 deductible you need to have $6,000 on hand. Or in both instances, you need to have a line of credit available in that amount. Once you meet the deductible, you will still be paying out of pocket for a percentage of any medical procedure up until the $10,000 max.

Just to reiterate. You get no coverage until you've met that deductible.

Say after you meet your deductible they cover 80% of the bill. With the $2,500 deductible, you are not 100% covered until you have had $40,000 of bills. With the $6,000 deductible, you are 100% covered after $26,000 in bills. In both instances, you are on the hook for $10,000 of that total.

It boils down to how much risk you are willing to take and if you have the money or a reasonable line of credit to cover that deductible if you get hit by it.

[RedFury]

Thanks Gomer, that changes our perspective quite a bit. I really wish they'd sit new employees down and discuss these things with people so they can make the right choice for themselves.

My limited knowledge had me thinking that we could get a leg up with an HSA to pay whatever portion of the medical bills we may incur. That's what I was thinking. It made sense at the time that it would be the best solution. Go to the doctor, you are on the hook for a percentage, and when the bill comes due, you can just pay it out of the HSA and not have to worry about it. In the mean time, you have another way to save up money for the future. It didn't occur to me that I simply would be paying my own health care with the HSA until the regular insurance started kicking in....doesn't seem like a very good idea.

I'm going to have to put more thought into this so we get the right coverage for us. The 80/20 plan I'm on at work costs $60/wk for my family with a $1000 deductible. I just hate getting extra bills that I need to put out of pocket for....I'd rather just pay monthly and not have to manage something extra if I can out of my own budget... Simplify is my motto.

[Gomer]

You're welcome!

But I am only about 90% sure what I said is right. Most Health Savings Accounts go along with High Deductible Health Insurance.

Does WallyWorld make any sort of contribution to the money that is in the HSA or you on your own as far as funding it goes?

The pluses of the HSA are lower premiums and it is a tax sheltered savings account that you can take money out of for health care. The downside is the high deductible.

Let me know if there is anything else you want to try to make sense of.

[RedFury]

Problem with the HSA it seems is the front side. Your not having anything in it initially puts you at high risk financially.

Wallyworld does contribute to the HSA, which is why I was so psyched to jump all over it. I'm trying to do everything I can to get incrementalism to work for me ( 401k, savings accounts, HSA, etc ) so that 20 years down the road, I'm sitting pretty, instead of looking back at lost opportunity like I have for the last 10.

[Gomer]

How much do they contribute to the HSA? That is, do they put money into the account as part of your reimbursement; or do they withhold a portion of your earnings to be put into the account; or do they require you to put money into the account in whatever fashion you see fit?