HDHP w/ HSA too good to be true?

[jdwhatever]

My employer is looking into a HDHP w/ HSA plan that just seems too good to be true. I happen to be extremely lucky in that my employer pays 100% of the premium and will also fully fund the HSA to match the deductible of the HDHP (3k/6k ind/fam). All expenses are "No charge after ded" and co-insurance is N/A when in-network. Out-of-pocket is 3k/6k but including deductible so I'm assuming that means any out of pocket expenses can just be applied to the deductible and paid by the HSA.

All of that while giving my employer a significantly lower premium. I've looked it over with a fine toothed comb and have reached out to friends, relatives and people I know in other small businesses dealing with health care decisions because this just seems way way too good to be true (especially because if I'm healthy all the unused HSA money is a nice little fund building up) and I wanted to ask you guys if I'm missing some glaringly obvious problem. No one I've talked has thought up a downside to this.

I've of course asked our broker about this and he sees no downside but I'd like to get an outside opinion. Perhaps any experiences by people using this type of plan?

[JoshuaHeckathorn]

I've used HDHP w/ HSA plans for the past 5 years or so, and I love them. My current family plan has a $5,500 Ded and 10% co-insurance with a max out-of-pocket of $10K.

Sounds like your employer is offering a pretty sweet deal since they're willing to fund up to $6,000 for you. The most I've ever had an employer contribute in the past is $1,000, and I believe the max that can be contributed for family plans in 2011 is $6,150.

The thing that really surprises me is that there's no co-insurance when in-network and your employer will cover all your premium too. If haven't seen that before. What's the co-insurance when you see a doctor out-of-network?

If these terms are really true, I don't see how you could say no. You basically get free healthcare coverage, and if you don't ever see the doctor, you'll just keep banking and investing the employer match each year in your HSA.

[jdwhatever]

I've used HDHP w/ HSA plans for the past 5 years or so, and I love them. My current family plan has a $5,500 Ded and 10% co-insurance with a max out-of-pocket of $10K.

Sounds like you're employer is offering a pretty sweet deal since they're willing to fund up to $6,000 for you. The most I've ever had an employer contribute in the past is $1,000, and I believe the max that can be contributed for family plans in 2011 is $6,150.

The thing that really surprises me is that there's no co-insurance when in-network and your employer will cover all your premium too. If haven't seen that before. What's the co-insurance when you see a doctor out-of-network?

If these terms are really true, I don't see how you could say no. You basically get free healthcare coverage, and if you don't ever see the doctor, you'll just keep banking and investing the employer match each year in your HSA.

Out-of-network fees are as follows:
$6k/$12k deductible
60% co-insurance
$18k/$36k out-of-pocket including deductible
Expenses instead of "No charge after ded" are "Ded & CoIns"

Not a big deal since no one on staff has gone out of network in at least 5 years.

Yeah, on paper it really seems like an amazing deal. And even with the HSA deposits, my employer will end up saving about $20k per year over the PPO plan we've been on for years. You have no idea how often the phrase "too good to be true" has come up in staff discussions. I still can't get rid of the lingering feeling of "there must be something I'm missing" which is why I resorted to going on a forum and having the plan be examined.

The HSA funding is especially nice because we have no employer-funded retirement whatsoever so this can act as a potential form of retirement for some employees.

[JoshuaHeckathorn]

Out-of-network fees are as follows:
$6k/$12k deductible
60% co-insurance
$18k/$36k out-of-pocket including deductible
Expenses instead of "No charge after ded" are "Ded & CoIns"

Not a big deal since no one on staff has gone out of network in at least 5 years.

Yeah, on paper it really seems like an amazing deal. And even with the HSA deposits, my employer will end up saving about $20k per year over the PPO plan we've been on for years. You have no idea how often the phrase "too good to be true" has come up in staff discussions. I still can't get rid of the lingering feeling of "there must be something I'm missing" which is why I resorted to going on a forum and having the plan be examined.

The HSA funding is especially nice because we have no employer-funded retirement whatsoever so this can act as a potential form of retirement for some employees.

Wow- big difference for out-of-network care, but it doesn't sound like that's something you need to worry about. Still looks like a nice setup to me.

Oh, and just a quick tip regarding HSAs...if you do have medical expenses and can manage to avoid using your HSA, that's even better. Pay for your expenses with cash, keep investing in your HSA, and treat it like a separate retirement account.

[MonkeyMama]

I think there are 2 things at play here. (Well, 2 things I have thought about).

#1 - The HDHP/HSA plan rewards savers. You have to be able to save the reduction in premiums to fund your HSA and/or your deductible. I simply think most people are not capable of this. But I will gladly set aside the difference for the reduced premiums.

#2 - I have all along felt it is "too good to be true" and expected that over time insurers will increase deductibles and/or premiums on these type plans. I feel they have made them a sweet deal to get people to switch and have wondered what the long term will be like. (We literally had to switch to HDHP or could no longer afford our insurance. As is, 15% of our income goes to premiums and deductibles, but was much worse before we switched).

We personally have had a HDHP for 3 years? Just entering year #4. We are perfectly healthy (never go the doctor - done having kids), but my husband had a bunch of MRIs the end of 2009, brain surgery January 2010, and I am actually having thyroid surgery this week. Thus, we have maxed out our deductible 3 years out of 4, thus far. Basically, we both had tumors that came out of nowhere. I still feel like we have come out WAY ahead than from our old plan (no deductible, but insane premiums and plenty of co-pays).

So, that is my experience, but I won't be surprised is premiums, deductibles, and out-of-pockets creep up in the future.

My advice would be to read all of the fine print very carefully. Things I always look at are co-pays, co-insurance, out-of-pocket amount, deductible amount, benefit maximums, etc. There are certainly plans that are really crappy and you wouldn't know until an emergency happens. Read up on it carefully and ask a lot of questions - that is my advice.

[LivingAlmostLarge]

They'll figure out a way to exempt stuff from the deductible and make you pay separately.