Is this insurance any good?
September 14, 2017 8:59 AM   Subscribe

Can you help me figure out why a job offer seems to include health insurance that's more expensive and has less coverage than my current individual plan? If so, what might be my negotiating options might be with this? (And if someone can explain how a national retailer has worse insurance than I do, that'd be interesting too!)

I got a job offer this week that looks good, except I'm pretty sure their group health insurance is both worse than the individual plan I'm currently on in both benefits and pricing. It looks like they basically have a Catastrophic-level plan (no coverage of costs before deductible) with a total cost that is higher than my Silver level plan.

I currently work for a small business that provides no health insurance, so in January of this year I signed up for a Silver level plan. I receive no subsidy for this plan. While expensive (about $300/month), I was expecting additional doctor visits this year, and I liked how with the Silver plan I only paid a $20 copay for each visit, and didn't have to worry about how much a given visit would cost. The deductible on this plan is $2,400. It's laughably good and I'm buying way more coverage than I need, but sometimes you need to spend some money to remove mental stress.

This job offer lists out two options for insurance, with the difference being the size of the network and deductibles. With the cheaper plan, which fits my network needs, my cost would be about $80/month, though the "total cost" (that is, showing what the company contributes towards) is shown as $450/month. Everything on this plan except for preventative care (which is covered at 100%, I think per ACA) is listed as "deductible, then 20% coinsurance", and the deductible is $2,600.

Other differences I've noticed are that my plan is an HMO and the job offer place is an ACO.

Slightly complicating matters is that starting in January my wife will need coverage. Generally speaking this would just double premiums and deductibles, but she does need to use health care somewhat frequently, so a plan with copays seems nicer than us paying up to a deductible. And looking at my insurance EOB, it seems like a doctor visit runs about $200, which means that if she visits a doctor monthly and we're covering that cost up to the deductible, we're basically breaking even with the individual plan with the $300 premium, right?

Right now it looks like I'd be better off having them write me a check each month for the $300-$400 they cover towards a single person's insurance and just buying my own, but that's gotta be wrong. I'm usually pretty good at sorting this stuff out, but I'm just really confused here on why my plan seems cheaper and better, so I feel like I must be missing something.
posted by Nonsteroidal Anti-Inflammatory Drug to Work & Money (15 answers total) 2 users marked this as a favorite
What's the out-of-pocket maximum for each plan? This is a key figure.
posted by ThePinkSuperhero at 9:07 AM on September 14, 2017

Response by poster: Ah, that's $6,550/person for theirs, and $7,150/person for my current plan.

In my mind I think that's probably a wash, given the simplified billing and potential lower costs with the copay plan?
posted by Nonsteroidal Anti-Inflammatory Drug at 9:12 AM on September 14, 2017

Yeah, I'd consider keeping your own. I bought a plan where I'm paying for every doctor visit (no copay), and it sucks. And I learned recently that there are 2 separate deductibles - one for in-network and one for out-of-network. So even if I hit my smaller deductible for in-network docs, if I then go to an out-of-network doc, I pay full price until I hit that separate deductible.

Stay on your own, and when open enrollment comes around, shop with your wife in mind as well. You can re-enroll with your new company's insurance at that time (just a few months away) if their option works better for you at that time.
posted by hydra77 at 9:23 AM on September 14, 2017 [2 favorites]

Is there an HSA? Often a high deductible plan like this will be paired with an HSA to lower real costs.
posted by brainmouse at 9:23 AM on September 14, 2017 [1 favorite]

There should be no reason to cancel your private insurance and go with coverage through the employer; I can't explain why the big retailer would offer crappy insurance, but they're all about cost-cutting so it shouldn't be a surprise that it amounts to only catastrophic protection.

Yes, if the big retailer allows you to decline the insurance, definitely get the employer's premium contribution added to your pay, so it can cover your private insurance -- they'll still be contributing to your insurance premiums, just not on their plan.
posted by AzraelBrown at 9:27 AM on September 14, 2017 [1 favorite]

Response by poster: Sure, more updates since I've missed some of the differences.

1) my plan also covers tier 1 medication with a $10 copay, while their plan has no coverage before the deductible. My wife has a few daily medications, and I may need to start some in the next several months.

2) While I don't have an HSA with my current plan, it's my understanding that I could qualify for one. Their plan does have an HSA, and matches $600 for an individual or $900 for a couple.
posted by Nonsteroidal Anti-Inflammatory Drug at 9:28 AM on September 14, 2017

Best answer: Your plan is cheaper and better because they negotiated shitty benefits as a company for themselves. That's it. They don't have the ability - this year, at least - to offer you anything other than what they decided to offer this year.

They can't, in most likelihood, offer you money instead of benefits, in the sense they cannot NOT offer you insurance in return for money. They can offer you more salary, but it cannot be conditional on you not accepting insurance coverage (either as a promise from you or a threat from them). And the fact that they do offer coverage as a company may make you ineligible for your current plan (ALTHOUGH if you're not subsidized this may not be the case).

You are always free to insure yourself elsewhere. Many people do because their company benefits are shit. Employers only offer good benefits as a retention tool, and if they don't need to worry about it they will cheap the hell out and not care. I'm in the middle of an employment change situation and this is a HUGE consideration for me as far as what offers I feel comfortable even considering. I've had previous employers go from a wide selection of appealing plans to total crap the next year (and blame all kinds of eye-rollable factors) when it was clearly a move to save cash, and flat out lie about how great their HSA shit sandwich was going to taste. There's very little altruism in the offerings employers make, at least until the company is in a position to use it to their advantage.
posted by Lyn Never at 9:29 AM on September 14, 2017 [8 favorites]

As brainmouse suggested, you should figure in the HSA benefit when evaluating the plan. Your employer is putting $600 into that account so that's $50 a month off your $80 a month premium. (You can't use the HSA money to pay premiums directly, but you can use it to pay for any other medical expense including deductibles, so it really is free money.)

So you would be getting insurance for $30 a month instead of $300 a month now. That's saving you $3240 a year. That more than pays for the $2600 deductible. Sounds like a better deal than you have now, assuming your preferred doctors are in network.

In addition, you can put up to $3400 (individual) into the HSA saving plan. This is even better than a Roth IRA. The money you put in is free of FICA taxes (15%) and free of income taxes (15% to 25%) and free of taxes at withdrawal if you use it for qualified medical expenses.
posted by JackFlash at 2:14 PM on September 14, 2017 [1 favorite]

Best answer: When you're doing your calculations on their plan you should also include the HSA on both sides of the equation. Assuming that you'll want the "couple" match to cover your wife, imagine you have $900 of upfront costs (what you pay into the HSA for them to match it). That gives you $1800 of covered expenses that would otherwise be out of pocket. So all your deductible, doctor visits, copays, whatever, come out of that $1800. HSA balances are yours to keep (unlike FSA balances, which are use-it-or-lose-it) so if you stay below that $1800 for the year, the next year you'd have a little health savings nest egg.

With the HSA and the ACO you have more or less a Republican dream plan, but whether you actually make enough money for it to pay off for you is something Republicans never talk about, blah blah prosperity gospel blah.

Also, that sort of plan probably has negotiated prices for a bunch of doctor visits, so while your current cost of a visit is, say, $200 (of which you pay only a copay) the negotiated price might be $120 (or even less), of which you're on the hook for 100% up to your deductible, but which you can pay out of the HSA with tax-free, partially-matched dollars.

You should ask if you can talk to their benefits administrator, because they should be able to tell you how your actual costs would work out for specific doctor visits.
posted by fedward at 2:18 PM on September 14, 2017

I should clarify that with an HSA contribution, the FICA savings to you are 7.5% since your employer pays the other 7.5% either way. You income tax savings are whatever your marginal tax rate, typically 15% to 25% for moderate incomes.
posted by JackFlash at 3:18 PM on September 14, 2017

Best answer: I once had a PPO that was similar in that I basically just paid a copay and higher premiums and changes jobs and went to a high deductible plan (only choices were high, higher and highest deductible and I worked for a major health insurance company!!!).

The numbers were about the same as yours and the company put in money into my HSA for me. Even though I hated the thought of getting a big bill, I found that:

1) the "negotiated rate" on a lot of services is a lot lower than standard rates. Like testing for some lab work when I was pregnant was billed to insurance for $900 and adjusted to the negotiated rate of NINE dollars and change. Sure, I'll pay the nine dollars.

2) the HSA money was MINE. So it accumulated year over year and I basically never paid out of pocket for things. Maybe that wouldn't be the case if I used a lot of healthcare services but let's say the negotiated rate on visits for your wife is $100/month, the $900 they provide covers most of the year and you can put in money pre-tax so don't forget the tax savings.

3) when I left THAT job, I still had my HSA. I couldn't contribute from my paycheck anymore but the $2000 that was in there was mine and I continued to use it for medical expenses until I spent it all.

Overall, for me and my daughter, I spent less out of pocket w he high deductible plan and HSA.
posted by polkadot at 3:29 PM on September 14, 2017

Response by poster: Your employer is putting $600 into that account so that's $50 a month off your $80 a month premium.

Well, they're matching, so I'm still spending more money, but if nothing else this does double the purchasing power of some of my money.

Also, that sort of plan probably has negotiated prices for a bunch of doctor visits, so while your current cost of a visit is, say, $200 (of which you pay only a copay) the negotiated price might be $120 (or even less)

That might be what I'm missing here. I can see on the EOB for my current plan that a given visit had a list price of ~$300, and that's what's been concerning me. Unfortunately I can't seem to to get any pricing without being in the new plan's system.

The new job is good enough that this isn't so much a sticking point as it is me just trying to understanding upcoming expenses, and I suppose worst case we're close enough to open enrollment that if for some bizarre reason I'm still getting hit up for $300/visit on the new plan, I'll be able to look into other options.

I appreciate all the advice and information!
posted by Nonsteroidal Anti-Inflammatory Drug at 9:30 AM on September 15, 2017

Keep in mind that, even forgetting the HSA contribution, you are paying $80 a month instead of $300 a month. That's $220 a month in savings that goes toward you deductible.
posted by JackFlash at 10:15 AM on September 15, 2017

Response by poster: Small followup: I ended up accepting a different job offer from a place that has 6 plan choices, covering both traditional PPO and HDHP options. They also included a chart to show the cost differences between the plans that nicely illustrated how one particular HDHP could be more cost effective than the rest of their plans. This chart really helped me understand how, yes, the numbers just didn't add up one the plan I was asking about here, but with other HDHPs it's possible to come out ahead.
posted by Nonsteroidal Anti-Inflammatory Drug at 8:25 PM on November 14, 2017

Response by poster: (er, come out ahead when compared to a traditional PPO type plan)
posted by Nonsteroidal Anti-Inflammatory Drug at 11:47 AM on November 15, 2017

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