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Finding the Best HSA Values On The California Health Insurance Market

Quick tips on the Anthem Blue Cross of California Clear Protection PPO Plan
Clear Protection Plans in California HSA plans make sense if you plan on funding the account (detail below)
Anthem Blue Cross Clear Protection 3300 HSA plans will continue to be offered after Health Reform (detail below)
Clear Protection 3300
Preventative is now covered prior to the deductible
Clear Protection 3300 Interest and investment is generally tax deferred and you can pay eligible expenses pre-tax

We've been fans of the HSA or Health Savings Account health plans in California since they we're called MSA's and for a very good reason.  They saved 1000's of our clients 1000's of dollars.  It's that simple.  So what is an HSA health plan and what is their future in light of the Health Reform requirements?  First, let's break down what the HSA is and how it can be beneficial.  We'll also discuss if it's still the great savings it has been over the past decade and what's required to really make it make sense.  So let's get started on the HSA.

What is an HSA plan and what are the advantages?

Very simply, the HSA generally refers to two separate parts. The first is an underlying high deductible health insurance plan.  Most of the carriers offer these HSA qualified plans and you'll see the "HSA" type next to these plans when running your California health insurance quote for both the individual/family or Group market.  Not any high deductible plan will do so make sure to look for the HSA sign.  As a side note, almost all the HSA plans currently use the PPO network of doctors aside from Kaiser.  With HSA plans, all benefits aside from preventative benefits are subject to the main deductible.  This is the biggest difference in core health plan benefits between the HSA qualified plans and other PPO high deductible plans and usually, the main effect is for office visits (no copays or co-insurance) and prescription (no copays).  Office visits (except for preventative) and prescriptions will be subject to the main deductible.  Otherwise, it's a high deductible (should be lower cost) PPO health plan.  So far, pretty straight forward.

The tax-favored HSA account is really the key

The second piece is where HSA's differ and really, it's where the potential cost savings can be found now that the health plan rates are now pretty comparable with other high deductible PPO plans.  If you are on a qualified HSA health plan, you may be able to fund a certain amount (indexed to go up each year with family plans allowing roughly double of an individual) into a separate tax-favored checking account.  You may be able to write this money off at tax time and here's the bonus...you can use these pre-tax funds to pay for eligible medical and dental bills with no tax implication.  As an example, the maximum yearly contribution is approximately $6K and for an individual, it's $3K.  Let's look at the individual situation.  If you fund the full amount each year (it's up to you how much you fund), and your federal tax rate is 30%, that's $900 (30% of $3000) of real after tax savings.  Divide this by 12 and we can say that your premium savings is roughly $80/monthly.  Once you take this into account against other PPO plans, the HSA starts to look real competitive.  It used to be that the core HSA health plans were priced much better than other PPO plans but that's not the case any more.  You really need the tax savings to make the numbers work unless....

California HSA eligible health plans

Today, HSA health plans offer some of the lowest true max out of pockets on the market.  What does this mean?  Most PPO plans have a deductible and then you pay a percentage (co-insurance) until you hit a separate max out of pocket (may or may not include the deductible depending on plan/carrier).  If you get a really big medical bill, the real out of pocket might by $7000-$9000 on mid-priced PPO plans.  That's a big number.   Many of the popular HSA plans today make the deductible and the max out of pocket the same number.  This means you may have a cap of $4K or $6K on these plans.  For some California health care shoppers, that out of pocket cap is more important than office copays and prescription copays.  This low cap is a key driver for many HSA applicants.   The tax savings is a bonus for these people.  A few notes.  Health insurance premiums cannot be paid from the HSA account.  The HSA accounts are not use it or lose it.  The amounts grow each year and interest and investment are tax-deferred.  Most large banks or investment houses now administer HSA accounts with debit cards and various investment options.  Wells Fargo has been a strong provider of the actual HSA accounts.  The allowed expenses are actually extensive and follow the Federal list of allowable medical expenses.  You can run your instant quote below (individual or group) for all California health plans including HSA and you can even segregate just the HSA eligible plans with a check box.  This is a good summary introduction to the world of HSA's but we're happy to walk you through them as it pertains to your situation.  We also have analyzed current best options for the HSA. 

Best HSA Values on the current market

Everything is set to change Jan 1st 2014 but let's look at the plans that make sense now:

California Individual and Family Market.  Blue Shield's Savings $4000 and $6000 have been the best value hand's down.  They're generally the lowest priced HSA plans on the market and we like the one deductible/max out of pocket benefit with single deductibles for each family member (up to two in a family).  That appears to be the only direction to go.  You can quote the Shield Savings Plans here.

California Small Group Market.  The group market is a little tougher since there are so many carriers and HSA plans available. It really comes down to a company's demographics (age, area).  Run your group HSA quote and compare Health Net, Shield, and Anthem which are usually strongest for the HSA plans in terms of pricing and benefits.

Health Reform and HSA's

We have recent news that supports the existence of HSA should continue after Jan 1st 2014 which is the big transition to the California Health Exchange.  This is good news.  The deductible may come down a bit but we'll still be able to gain the tax advantages associated with the HSA.   You can find more information here:  HSA future in the Health Exchange.

Related Pages:

Health Reform HSA options in California
Current California HSA individual family health plans
Why high deductibles make sense
Individual deductibles versus family cumulative deductibles for HSA in California

   


                         

 

 



 

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