HRA / HSA Vs "regular" Health Insurance?

[Guest]

So now that I am 26 I had to get my own health insurance. Work offers an HRA & a HSA plan from Cigna. I signed up for the HRA as the limit you had to hit before coverage begins is less. The HRA is $750 per yr vs the HSA $1500 per yr for an individual out of pocket before they help with co-pays.

Looking at my paycheck I am paying $186 a month for this. Being a young healthy guy I doubt I will ever hit $750/yr so I will probably just have to pay 100% of all my visits each year and put in the $186 as a "just-in-case" I ever had a major medical treatment. I guess this is kind of like car insurance.

Previously I was under my parents and all of my various visits were partially covered only requiring me to co-pay for each. Because I am now paying into insurance each month and they will not help until I hit my limit I can't help but feel ripped off.

• Is this a normal policy / $ limit for an HRA / HSA?
• Are HRA / HSA plans cheaper than they other co-pay type like I described above to balance things out or am I still putting in just as much each month?
• Should I be looking into other options such as obamacare or do they work differently than the co-pay type (sorry I don't know the specific name) plans?

Thanks all in advance!

 

[LGilmore]

"I can't help but feel ripped off."

Let me be the first to say it "welcome to adult life.."

I suggest you open your plan summary and get out a scratch pad and start reading. The summary isn't a hard read, but I have found it helps when you write down numbers at the same time.

So we know your deductible is $750. does it apply to everything or just medical services? RX separate? The summary should tell you what applies to it.

What is your co-insurance %? 10%, 20%, 30%, O% and how much does it apply to.

For example a $750 deductible followed by a 80/20% split on the next $10,000 in Claims would mean you have a maximum cost of $2750 for the plan year. That would be your maximum cost paid out in a year, that is important to know.

What you're doing by using a HSA or HRA is self insuring the first part of your coverage so the ongoing monthly premium will be lower. First dollar plans tend not to be abused by users because they are your dollars, rather than the insurance company's.

And everything is Obamacare now. Nothing special elsewhere unless you're looking at a subsidy. The problem for you is your cost because your employer provides you with insurance cost must be greater than 9.5% of your income to be eligible for any subsidy.

Again welcome to the adult world. Everybody hates insurance, including me, till you need it. If you don't have it when you need it, you're pretty much screwed. Quick example, son broke his ankle in a LXcrosse match. The bill to fix it was $40,000. Our deductible and co-insurance at the time maxed out at $3,000. The insurance company picked up the $37,000 difference and the rest of the year, he was covered at 100%. While $3,000 is a lot of money, it's far and away less than $40,000. That's when insurance doesn't s uck.

Cheers.

 

[Happy Texan]

If your employer has 200 or more employees, and wishes to look at self funding. contact me.
We are a new insurer, looking for approval by the Texas Dept. of Insurance in July.
Our patented Health Matching Insurance benefits pays from dollar one, just like an HRA or HSA.
Unlike those 2 options, our money grows at 8% per month, and tops at 300% per month after 36 months. More coverage paid for up front means lower premiums for you and your employer.
Don Levit
Treasurer National Prosperity Life and Health

 

[LGilmore]

"our money grows at 8% per month, and tops at 300% per month after 36 months"

OK. I'll bite.. how? Please clarify what you mean with a statement like this. Be specific as I am reading it as a ROI promise, am I correct?

 

[Guest]

"I can't help but feel ripped off."

Let me be the first to say it "welcome to adult life.."

I suggest you open your plan summary and get out a scratch pad and start reading. The summary isn't a hard read, but I have found it helps when you write down numbers at the same time.

So we know your deductible is $750. does it apply to everything or just medical services? RX separate? The summary should tell you what applies to it.

What is your co-insurance %? 10%, 20%, 30%, O% and how much does it apply to.

For example a $750 deductible followed by a 80/20% split on the next $10,000 in Claims would mean you have a maximum cost of $2750 for the plan year. That would be your maximum cost paid out in a year, that is important to know.

What you're doing by using a HSA or HRA is self insuring the first part of your coverage so the ongoing monthly premium will be lower. First dollar plans tend not to be abused by users because they are your dollars, rather than the insurance company's.

And everything is Obamacare now. Nothing special elsewhere unless you're looking at a subsidy. The problem for you is your cost because your employer provides you with insurance cost must be greater than 9.5% of your income to be eligible for any subsidy.

Again welcome to the adult world. Everybody hates insurance, including me, till you need it. If you don't have it when you need it, you're pretty much screwed. Quick example, son broke his ankle in a LXcrosse match. The bill to fix it was $40,000. Our deductible and co-insurance at the time maxed out at $3,000. The insurance company picked up the $37,000 difference and the rest of the year, he was covered at 100%. While $3,000 is a lot of money, it's far and away less than $40,000. That's when insurance doesn't s uck.

Cheers.

Thank you for the detailed reply! Haha I knew this wouldn't be a "great deal" going in and if I do get hurt of course I will be happy to have it. Just different than on my parent's plan for 26-years I only had a co-pay not the full amount up to a certain limit.

$750 applies to everything I believe except RX. They gave me a CVS care card for that but I will get an answer from HR.

The plan is $750 OOP, followed by an 80/20% split up to $2,500 then 100% Cigna.

• Am I probably putting in less each month than the other type of plan I used to have?
• Is this plan a rip-off in your opinion or fair compared to others?

 

[Happy Texan]

With each contribution, there is an increasing multiplier assessed each month.
We are able to do this, not by investing ourselves at anything close to those rates.
We have to be conservative as an insurer, and will make piddly returns on our investments.
We believe that every claim not filed increases our reserves.
Through the pooling effect, we are able to provide such benefits without further premiums paid, for , obviously, not everyone will have a claim each month.
Second, the benefits grow faster than the typical employee or dependent uses them, increasing their paid for balance.
Third, when a claim is made, the amount is subtracted from their balance, like a 401(k) distribution, and their multiplier starts in whatever month their balance falls in to.
This helps us with large repetitive claims, and puts more of the onus on the employer.
Over time, though, because for the vast majority of employees and dependents, their balances are growing faster than their claims, thus transferring more and more of the risk from the employer to NPLH, on a paid-for balance.
Fourth, this balance can be only used for medical benefits.
Because it is not in the form of cash, the numbers can accumulate much faster than cash.
When an employee leaves, he forfeits all remaining benefits, allowing us to provide higher benefit accumulations while an active employee.
In a sense, we are sharing our reserves with our clients who file lower claims.
This has been analyzed very carefully by Milliman, a well-respected actuarial firm, who is being very helpful in explaining our unique patented product to the Texas Department of Insurance.
We have had 2 meetings in Austin, and expect approval shortly.
Don Levit

 

[LGilmore]

"750 applies to everything I believe except RX. They gave me a CVS care card for that but I will get an answer from HR."

Double check and see if RX doesn't kick in after the 750 is met. Bet it does but at coinsurance levels.

" The plan is $750 OOP, followed by an 80/20% split up to $2,500 then 100% Cigna.
•Am I probably putting in less each month than the other type of plan I used to have?
•Is this plan a rip-off in your opinion or fair compared to others?"

No, at 168 a month it is not a rip off for you, that actually sounds fair priced. It's more a question of do you need that level of coverage for your young age? Don't know your habits or what you do for fun, but accidents are probably the main reason you'll end up in the doctors office in your 20's. Use your note pad again and write down how much you spent on healthcare that wasn't a premium. Was that a normal year?

If you find you're spending a little bit and you're in good health consider the other plan next year if they offer it and it's cheaper. Just always be aware of the max cost to you if there is a claim. Be able to cover it.

Fund your account as that is the only way you'll get the tax breaks these plans offer. You will need to pay for health related expenses through that account to get the tax free benefit.


Good luck.

 

[Guest]

"750 applies to everything I believe except RX. They gave me a CVS care card for that but I will get an answer from HR."

Double check and see if RX doesn't kick in after the 750 is met. Bet it does but at coinsurance levels.

" The plan is $750 OOP, followed by an 80/20% split up to $2,500 then 100% Cigna.
•Am I probably putting in less each month than the other type of plan I used to have?
•Is this plan a rip-off in your opinion or fair compared to others?"

No, at 168 a month it is not a rip off for you, that actually sounds fair priced. It's more a question of do you need that level of coverage for your young age? Don't know your habits or what you do for fun, but accidents are probably the main reason you'll end up in the doctors office in your 20's. Use your note pad again and write down how much you spent on healthcare that wasn't a premium. Was that a normal year?

If you find you're spending a little bit and you're in good health consider the other plan next year if they offer it and it's cheaper. Just always be aware of the max cost to you if there is a claim. Be able to cover it.

Fund your account as that is the only way you'll get the tax breaks these plans offer. You will need to pay for health related expenses through that account to get the tax free benefit.


Good luck.

Thanks again! Sadly all my work offers now is an HRA or HSA and the HRA seemed like the lesser evil haha. I just didn't know how obamacare worked compared to this. There wasn't an option for me to pick any different levels, just to chose between the two types. I am still VERY new to this so I'll have to look into funding my account appropriately.