- For Employees
- For Partners
Comparing your health insurance options is in many ways a numbers game. Sure, there are other elements involved, but when it comes down to it, the main points of differentiation between one plan option and the next boil down to numbers—or more accurately—what they will ultimately cost you.
In a time when finding ways to save and make smarter use of your money has never been more critical, it’s worth your while this open enrollment season to consider switching to a health savings account (HSA) eligible high-deductible health plan (HDHP) if you’re currently covered by a traditional PPO plan. An HDHP paired with an HSA:
Simply put, if you’re currently enrolled in a traditional health plan, PPO or otherwise, you’re losing out on premium dollars that could be better invested and spent elsewhere, along with many other tangible benefits.
But we get it, “high-deductible health plan” can sound scary and make you feel uneasy. So again, trust the numbers. Let’s take a look at how you come out ahead choosing an HDHP with an HSA versus a traditional PPO health insurance plan.
You don’t have to be a health insurance expert to be confident you’re making the best and most cost-effective decision. Before we dive into the examples, let’s quickly map out two tips to compare your HDHP versus PPO options like a pro:
To start, let’s explore a simple sample breakdown from an employee exploring her options for family coverage. A couple important points to note—the monthly premium for the HSA-eligible HDHP is $120, while the traditional PPO plan is $375. And her employer contributes $1,500 annually to each employee’s HSA who chooses family HDHP coverage—employers aren’t eligible to make contributions to traditional PPO plans.
|HDHP with HSA||Traditional PPO Plan|
|Total cost before coinsurance||$4,440||$5,500|
|Employer HSA contribution||$1,500||n/a|
|True annual cost before coinsurance||$2,940||$5,500|
By choosing the HDHP with HSA option, she saves $2,560 annually. She can take that savings alone and contribute it pretax to her HSA to not only save on taxes by lowering her taxable income, but also grow her funds tax-free and either save and invest or use them for any eligible healthcare expense tax-free—or choose to contribute even more (or less) to her HSA depending on her specific circumstances. But long story short, no matter what she does with that savings, she’s coming out ahead from where she’d be if she stuck with her traditional PPO plan.
Next, let’s explore an example specific to her HSA usage.
The numbers don’t lie— the financial savings you can achieve with an HDHP and HSA is real, and more often than not, definitely worth your while to make the switch from a traditional PPO plan.
Remember, these are just general examples to give you an idea of how an HSA/HDHP combination stacks up against a traditional PPO plan. Many employers often provide tools to run your own numbers specific to your plan options, but even if you don’t have access to an automated tool through your employer, you can still do a side-by-side comparison just focusing on the basics—premiums, deductibles, employer contributions—and looking at your average yearly healthcare spending.
So now you’ve seen the numbers and how much you stand to save by switching to an HDHP/HSA option. But perhaps you’re still tentative at the thought of going through the process and making it official.
It’s important to understand that numbers aside, an HDHP paired with an HSA isn’t all that different from traditional non-HDHP health insurance plans. Here are just some of the similarities that make the switch simple and seamless:
Enrolling in an HDHP and utilizing an HSA helps you keep more of your hard-earned money and lower your overall healthcare costs, among other benefits.
By leveraging an HDHP with an HSA, you’re able to keep saving money tax-free and adding to your HSA savings while taking a more active role in controlling your healthcare costs—all things you can’t do with a traditional health plan. And by managing your HSA effectively, you can set yourself up with savings to use for current and future medical expenses without worrying about added financial strain—all with an eye on your long-term financial health.
Remember to trust the numbers and not be scared off by changing up your health insurance coverage for the coming year—especially if you’re used to the structure of traditional health insurance plans. Once you make the switch and experience all the advantages of choosing an HDHP + HSA for 2021—not to mention all the monetary savings—you’ll never look back.
And if you need to choose your own HSA provider once you’ve enrolled in an HSA-eligible HDHP, look no further than Bend. With a Bend HSA, you don’t have to be an HSA expert to make the most of your account. We’re here to help you every step of the way and provide you with the resources, tools and education you need.
No matter who you are or where you’re at in life, we’re here to help you make the most of your health savings account.