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High Deductible Health Plan and Health Savings Accounts

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Cainlord

Member
What is the name of your state (only U.S. law)? ND

My company is looking to go with a HDHP and a HSA type plan setup. This change will make it such that the insurance will not kick in at all till after X amount of dollars have been spent towards the deductible. The company is also looking to provide some money in the HSA initially and then on a going forward basis.

Currently, my CSO states that I am to provide the medical insurance for our child only. Based on this change that will be occurring as well as that HSA that will be setup and have some funding put into it by the company, how does that affect my current insurance arrangement, if at all? Initially, I am thinking that nothing changes as I am still providing the assurance as the judgement states. But I am not sure if I need to handle the HSA differently in some fashion outside of just providing the insurance?
 


LdiJ

Senior Member
What is the name of your state (only U.S. law)? ND

My company is looking to go with a HDHP and a HSA type plan setup. This change will make it such that the insurance will not kick in at all till after X amount of dollars have been spent towards the deductible. The company is also looking to provide some money in the HSA initially and then on a going forward basis.

Currently, my CSO states that I am to provide the medical insurance for our child only. Based on this change that will be occurring as well as that HSA that will be setup and have some funding put into it by the company, how does that affect my current insurance arrangement, if at all? Initially, I am thinking that nothing changes as I am still providing the assurance as the judgement states. But I am not sure if I need to handle the HSA differently in some fashion outside of just providing the insurance?
Basically, the way that it works is that you will end up with a lot more out of pocket costs. In fact, with normally healthy children in most years insurance probably won't cover anything at all. That is where the HSA kicks in. The HSA is designed to cover some of those out of pocket costs.

Therefore, you really need a family HSA, and you need to use the HSA to cover costs above a more normal deductible level. If you only use the HSA to cover your share of the out of pocket costs, then you are allowing the other parent to be penalized unfairly.
 

mistoffolees

Senior Member
What is the name of your state (only U.S. law)? ND

My company is looking to go with a HDHP and a HSA type plan setup. This change will make it such that the insurance will not kick in at all till after X amount of dollars have been spent towards the deductible. The company is also looking to provide some money in the HSA initially and then on a going forward basis.

Currently, my CSO states that I am to provide the medical insurance for our child only. Based on this change that will be occurring as well as that HSA that will be setup and have some funding put into it by the company, how does that affect my current insurance arrangement, if at all? Initially, I am thinking that nothing changes as I am still providing the assurance as the judgement states. But I am not sure if I need to handle the HSA differently in some fashion outside of just providing the insurance?
Just to be clear - you are responsible only for providing health insurance? Your decree says nothing about you paying any deductibles or out of pocket costs?

If so, then technically, nothing has changed. You are still providing insurance. HOWEVER, your ex could go back to court for a modification on the basis of their out of pocket cost rising dramatically.

Far better to work out an arrangement where some portion of the HSA money can be used by your ex for out of pocket costs. In addition, since your payment for the insurance premium is probably going to drop, you might kick in some extra - so that you get back to roughly the original intent of the decree.
 

Cainlord

Member
that is correct that I don't pay anything but providing the insurance.

insurance premium is going to stay the same. Wellness items will be covered however at 100%, after deductible, going to 80% covered, then, after coinsurance of $5K, 100%

I am figuring that we will go back to court for other issues as well since its re-up time for my CS, just wanting to make sure if I need to before hand set aside HSA funds or, if I provide those to the CP, since its not in my CO, would that be considred a gift?
 

mistoffolees

Senior Member
that is correct that I don't pay anything but providing the insurance.

insurance premium is going to stay the same. Wellness items will be covered however at 100%, after deductible, going to 80% covered, then, after coinsurance of $5K, 100%

I am figuring that we will go back to court for other issues as well since its re-up time for my CS, just wanting to make sure if I need to before hand set aside HSA funds or, if I provide those to the CP, since its not in my CO, would that be considred a gift?
Anything you give your ex that's not court ordered is a gift.
 

Cainlord

Member
To expand on what is in my court order, here is what it says, I am confused now which part takes precedence as it sounds contradictory when comparing the first part to the second?

Custodial Parent shall provide satisfactory health insurance for the parties' minor child if such insurance is available to the CP at no or nominal cost. If such insurance is not available at no or nominal cost, the NCP shall provide satisfactory health insurance coverage for the minor whenever such coverage is available at reasonable cost to the NCP.
Then the next part:

It is recognized that health coverage is available to the NCP. That NCP shall provide health insurance coverage for the minor so long as it is available to the NCP at a reasonable cost to the NCP through NCP's employer. NCP will place the child on their health insurance and provide proof of coverage to the CP.
So from this, it sounds like the first part is saying that the CP can put the child on there health insurance, and if its not available or at a nominal cost, I will provide insurance. the second part sounds like its saying I have the insurance, and I will put our child on my insurance as long as its available at a reasonable cost (which it is) and it will remain that way as long as its a "reasonable cost" which to me it is.

Is my understanding correct on this? This is all that is mentioned concerning medical insurance for our child.



As for the HSA, what exactly would I need to fill out and have her sign to agree to a change in the decree outside of going to court with the lawyers, etc. to acknowledge the amount that would be put aside for our child?

Also, the plans available are broken down by the type of coverage, ie:

- Single
- Single plus dependents
- Family (ie- adding in a spouse)

would I calculate based on single plus dependents or Family (I am married)? I was thinking single plus dependents as based on the fact I am to provide coverage, that would be what I would choose if it was just myself and my child. Then, as was done initially when my first order was processed, the lawyer divided the premium paid among the amount of total children (they did this for counting towards child support total I was told?). So for the HSA, would make sense then to do it the same way, so for example:

1000 HSA amount per year
3 children total + myself (single plus dependents)

$250 HSA per year goes to my child I pay support for?

Does that sound about right?
 
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stealth2

Under the Radar Member
Basically, the way that it works is that you will end up with a lot more out of pocket costs. In fact, with normally healthy children in most years insurance probably won't cover anything at all. That is where the HSA kicks in. The HSA is designed to cover some of those out of pocket costs.

Therefore, you really need a family HSA, and you need to use the HSA to cover costs above a more normal deductible level. If you only use the HSA to cover your share of the out of pocket costs, then you are allowing the other parent to be penalized unfairly.
I have to thank you, LDi... I've been on this type of plan for a year, and it never really clicked with me how it worked until what you posted above. I dunno why - it's pretty clear and I'm not stupid. But now it makes sense to me. I need to look at the entire picture of deductible, HSA, and OOP expenses versus our usage history to figure out what's the best option for us.

'Cause right now? My insurance operates as something that will kick in should we have a catastrophic event. 'Cause I'm not meeting my deductible, so I'm really getting no use out of my insurance.

So THANKS!
 

Cainlord

Member
I updated my last post prior to the last user post, if anyone can review it and comment, I would appreciate it. Thanks.
 

mistoffolees

Senior Member
I updated my last post prior to the last user post, if anyone can review it and comment, I would appreciate it. Thanks.
Your decree is horrible. What the heck is 'reasonable cost'? Basically, you have a decree that amounts to the two of you need to agree on what you're going to do and if you can't agree, you're back in court.

I think I'd sit down with your ex and a calculator and come up with a reasonable split of expenses and then submit it to the court so you don't have any more vague rules like 'reasonable expense'.
 

Cainlord

Member
Yeah it is confusing. I am not sure why it was written this way, but as I am no lawyer, i figured the ones we both had at the time of this being created had drawn it up sufficiently. Unfortunately in this case and in other situations, that is not the case and i wasn't expecting way back then to be in this situation with insurance.

looking online, it appears this "reasonable cost" is common verbiage from the child support enforcement agency for my state as can be seen here in this presentation:

http://www.nd.gov/dhs/services/childsupport/docs/outreach-program-presentation-2009.pdf



As it sits right now, what is the name of the document I would need to submit to the court to have this changed or anything else changed that we can agree on? Anyone have a link to it online?
 
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LdiJ

Senior Member
I have to thank you, LDi... I've been on this type of plan for a year, and it never really clicked with me how it worked until what you posted above. I dunno why - it's pretty clear and I'm not stupid. But now it makes sense to me. I need to look at the entire picture of deductible, HSA, and OOP expenses versus our usage history to figure out what's the best option for us.

'Cause right now? My insurance operates as something that will kick in should we have a catastrophic event. 'Cause I'm not meeting my deductible, so I'm really getting no use out of my insurance.

So THANKS!
You are welcome...

Once upon a time, heath insurance was designed to only cover catastropic events. It wasn't designed to cover every day medical expenses or ordinary illnesses.

It was only designed to cover big ticket issues...and it was relatively cost effective. Most people could afford it and most employers could afford it.

However about 15 to 20 years ago the whole HMO/PPO bit started and the it suddenly got a lot more expensive...and suddenly healthcare providers needed all kinds of staff to cover the administrative costs of dealing with insurance, and not only did insurance get more expensive, but medical providers costs went up because they needed staff to deal with it...and the malpractice insurance was a big issue too.

Prior to that a doctor normally didn't charge all that much for an ordinary visit. Their overhead was reasonable.

So now, a primary care doctor who normally would have been able to just have an office with himself and his nurse/receptionist, now needs at least a staff of a couple of extra people, just to deal with the insurance issues.

So everything is a lot more expensive than it used to be...on both sides.

So now, we have tons of people who are realtively healthy who choose do do without health insurance. Why? because they might only go to the doctor a couple of times a year, and spend a couple of hundred each time, when insurance would cost them thousands a year.

However, if things were back where they were 15-20 years ago many of them would have paid for catastropic health insurance.

Even the high deductible policies with HSAs aren't similar to 15-20 years ago.
 

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