Why Employer-sponsored Health Insurance?

#003 – Know why you get insurance through your employer and how it saves you money overall.  Learn a brief lesson as to how employer-based insurance got its start and build your foundation of understanding all of the advantages available to you from your health insurance  that would not be available if you were left all on your own.

Plus……..get a helpful tip on how to make the most of your deductible.

Why You Need An Embedded Deductible

So you can keep thousands of dollars in your pocket…

First, you need to see what the IRS permits for a Health Savings Account and High Deductible Health Plan.

HSA eligible HDHP

According to the IRS, in order for a High Deductible Health Plan (HDHP) to be eligible for for use with a Health Savings Account, the HDHP must have the following:

IRS MINIMUM

Individual Deductible must be no lower than: $1,400

Family Deductible must be no lower than: $2,800

*IRS rules consider Family to include Employee + Spouse, Employee + Child(ren), Employee + Spouse + Child(ren)

Next, understand how a Family Deductible works in an HDHP.

Example Application of Family Deductible

Mr. & Mrs. Smith have a high deductible plan.  The plan has the following deductible:

Individual $3,000

Family $6,000

Mr. Smith has a skiing accident in Park City and now needs knee surgery.  The knee surgery will cost $20,000.

Mr. & Mrs. Smith are subject to the Family Deductible, due to being categorized as Employee + Spouse, which is $6,000.

Cost of Knee Surgery $20,000

Family Deductible $6,000

Balance Paid by Plan $14,000

Mr. & Mrs. Smith paid $6,000.Next, understand how the Embedded Deductible works in an HDHP.

Example Application of Embedded Deductible

Mr. & Mrs. Smith have the same high deductible plan shown above:

Individual $3,000

Family $6,000

Mr. Smith has the same skiing accident and knee surgery costing $20,000.

Mr. & Mrs. Smith are subject to the same deductibles as above, EXCEPT THAT the deductible is embedded.

Cost of Knee Surgery $20,000

Embedded Deductible $3,000

Balance Paid by Plan $17,000

Mr. & Mrs. Smith paid $3,000.

The Embedded Deductible HDHP saves Mr. & Mrs. Smith $3,000.

The key requirement for an Embedded Deductible is that the Individual Embedded Deductible must be higher than the IRS minimum non-embedded deductible for a Family.

In 2020 and 2021 the Individual and Family HDHP minimums, as shown above, are:

Individual $1,400

Family $2,800

Therefore, the IRS required minimum Individual Embedded Deductible is:

Individual 

Embedded Deductible $2,800

As always, contact me with any questions:

https://scottwdowling.com/contact/

If you love the music, like me, hear my pal, Morgan Fingleton, at:

https://morganfingleton.com

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