Loading ...How can switching from your traditional insurance plan to a High Deductible Health Plan (HDHP) with a Health Savings Account (HSA) save you money? Take a look at the chart below.
In this example, a family had a traditional health insurance policy with a $1000 deductible. This family switched to a HDHP with a $5150 deductible and then put $5150 into their HSA.
At the end of the year, they saved more than $600 and still had more than $2900 in their HSA to cover future medical expenses for a total savings of almost $3000 in one year.
| Sample Comparison of Traditional vs HDHP with an HSA | Traditional Plan | HDHP + HSA |
| Deductible | $1000.00 | $5150.00 |
| Coinsurance | 80% / 20% | 100% |
| Adding Expenses: | ||
| Annual Premium | $6804.00 | $4501.20 |
| Out-of-Pocket Costs to Cover Deductible | $1400.00 | NA |
| Out-of-Pocket Costs to Cover Coinsurance | $800.00 | NA |
| HSA Qualified Expenses | NA | $2200.00 |
| Unused HSA Contribution (Assuming $5150 Contribution) | NA | $2950.00 |
| Expenses Subtotal: | ||
| Subtracting Tax Savings | ||
| Savings: HSA Contribution Tax Reduction for Current Year* Multiply HSA contribution by tax rate to realize tax savings and subtract from the HSA expense subtotal |
$5150.00 x.25 $1287.50 |
$9651.20 -($1287.50) $8363.70 |
| NET EXPENSES FOR CURRENT PLAN YEAR | $9004.00 | $8363.70 |
| FUNDS AVAILABLE FOR NEXT PLAN YEAR THROUGH HSA* | $2950.00 | |
* Consult your tax adviser regarding the tax benefits of an HSA for your particular situation.
* Your HSA will also have some interest growth.