Which is better a plan that offers copay’s or an HSA eligible plan?

There is no one right answer. Which of these plan types will work best for you depends on your situation. First For people who normally don’t take prescriptions or need to go to the doctor often and HSA will probably be For most people who buy their own health insurance, the big decision will be whether to get a Copay plan or to get an HSA (Health Savings Account) eligible plan.

HSA eligible plan: The main advantages of HSA plans are that you can use pretax income to pay for medical expenses until your deductible is met and the premiums are usually lower than similar plans that offer a copay benefit. On the negative side, you have very few if any medical expenses covered under the plan until the deductible is met. Most HSA’s use preferred networks. As long as you utilize a network provider you will get the discounted network rates for medical expenses. Some HSA’s also cover preventive office visits with a copay.

In order for a plan to qualify as HSA eligible it must be considered a High Deductible Health Plan (HDHP). For individuals the deductible must be at least $1,100 for family’s $2,200. After your deductible is met you will have the choice of coinsurance levels such as 70%, 80%, and 100%. This means after the deductible is met if you have 80% coinsurance, the insurance provider will pay 80% and you will pay 20% of medical expenses incurred up to a specified limit. If you have 100% coinsurance, medical expenses are covered 100% after your deductible is met. On HSA plans I always recommend going with 100% coinsurance if it falls within your budget.

The total of your deductible and the maximum amount of coinsurance is called your Out of Pocket (OOP) maximum. Your OOP maximum can vary greatly, so if you choose a plan with coinsurance make sure you know how much your OOP is.

Who benefits the most by choosing an HSA plan? HSA plans are most popular with those who typically do not have many medical expenses. If you are individuals who doesn’t get sick or injured that often, and HSA plan is probably your best deal. The tax savings and the lower premiums more than offset the cost of having to go to the doctor’s office a few times or take a prescription here or there.

Copay Plans: These plans cover doctor’s office visits and prescriptions with a copay benefit before your deductible needs to be met. Each insurance provider offers multiple copay choices and their benefits differ from one another. It is important to understand how each of the carriers copay benefits work in order to make the best choice. For example UnitedHealthOne’s copay select plan offers unlimited office visits where as another carrier will have 4 visits/year per family limit.

Is a Copay Plan right for you?  If you like the security of being able to go to your doctor and/or having prescription coverage without having to meet your deductible first, then a plan that offers copay benefits is right for you.