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Tips and Tools
It may not seem like a better health insurance plan, but a high deductible HSA will, in most cases, give you both better benefits and less out of pocket costs.

These plans are generally touted because they offer you lower premiums, due to the fact that you are accepting a higher deductible and giving up some nice first dollar perks, like doctor copays and prescription drug copays. But the real advantage to an HSA is in the tax savings. Assume you are at least in the 25% federal tax bracket, then let's do some old fashioned math. Example1: You see the doctor, and the office visit is $60.00. With the old traditional health insurance plan with a $25.00 doctor copay, you pay the doctor $25.00. Great deal right?...but wait if you're in a 25% federal tax bracket and pay an additional 5% to your state, then you have to earn $25/.7 or $35.71 to pay that $25.00 ($35.71 x 30% = $10.71 is the tax you will pay on your $35.71 to keep $25.00 after tax). So you really didn't have a $25.00 copay; you have a $35.71 copay thanks to the tax man. Now let's do the same thing with an HSA. Now you pay the full $60.00 to the doctor, but you get $18.00 in tax savings ($60.00 x 30% = $18.00). So with your HSA, you actually have a $42.00 office copay - almost identical to the traditional plan.
Example 2: You need to get some blood work done, it costs $400. In both cases you will probably pay this yourself (unless your traditional plan has a $250.00 deductible - very rare). With a traditional plan your cost is $400.00/.7, or $571.43 with taxes. With the HSA, your cost is $400.00 - tax savings = $280.00, almost $300.00 less.
Example 3: You have a major accident and your medical bill is $25,000.00. Let's assume your traditional plan is a typical $1000 deductible, then 80% coinsurance to a maximum of $5,000.00 out of pocket. Then your bill will be $1,000.00 plus 20% of the balance to, in this case, a maximum of $5,000.00 - or $6,000.00, for which you will have to earn $6,000/.7, or $8,571.43. Your bill with the HSA will undoubtably also be $6,000.00, but you will get $1800.00 in tax saving, thus it will actually only cost you $4,200.00.
So you not only save money on your premium, you actually, in most cases, even save money on your medical expenses.
--And here's another good reason to have an HSA. Do you go to the dentist or eye doctor each year? The IRS allows those expenses to be paid with an HSA account. So, why pay for those expenses with after tax dollars; instead, write it off your taxes with an HSA! For more information on how an HSA can fit your situation, please Contact Us. For additional information on qualified expenses allowed by IRS Download IRS Publication 502.