HAHN AGENCY, INC.HAHN AGENCY, INC.
MSA Qualified Health Plan
| Question: | What’s the main difference between a MSA qualified health plan and a non-qualified health plan? |
| Answer: | The Deductible. |
The deductible, (and the coinsurance structure), is different than your typical major medical policy. Your current major medical plan CANNOT be converted to MSA Qualified plan.
YOUR HEALTH INSURANCE COVERAGE MUST BE REWRITTEN.
How high are the deductibles? The maximum deductibles allowed on an MSA qualified health plan are as follows:
| INDIVIDUAL DEDUCTIBLE | $2,300.00 |
| FAMILY DEDUCTIBLE | $4,650.00 |
You want to select the maximum deductible....... Why?
Two Reasons:
| 1. | The higher
the deductible on your MSA qualified health plan, the more
money you can shelter in your
Medical Savings Account. |
| The Formula for determining your maximum annual contribution to your medical savings account is as follows: |
| INDIVIDUAL POLICY: | Up to 65% of the INDIVIDUAL Deductible |
| Maximum Contribution to MSA = $2,300.00 X .65 = $1,495.00 |
FAMILY POLICY: |
Up to 75% of the FAMILY Deductible. |
| Maximum Contribution to MSA = $4,650.00 X .75 = $3,487.50 |
| 2. | The higher the deductible you select, the lower the premium for the MSA qualified health coverage! |
| I use these maximum deductibles in the | MSA Explanation and in the |
| MSA Cost Comparison. |
| Question: | What’s the other difference between a non-qualified health plan and a MSA qualified health plan? |
| Answer: | The Individual and Aggregate Out-of-Pocket Expenses. |
Let’s compare the individual and aggregate Out-of-Pocket expenses between a Non-Qualified Plan and a MSA Qualified Plan.
Out of Pocket Expenses: Non-Qualified Plan
The non-qualified plan used in this comparison is a typical major medical plan. There is a $500.00 deductible. The coinsurance expense to you would be 20% of the next $5,000.00 in charges after the deductible, or $1,000.00. The total of the deductible and coinsurance would give you the Individual Out-of Pocket Expense of $1,500.00. The Aggregate Out-of Pocket Expense is three times the individual limit for the year. (Very Common).
The maximum individual and aggregate out-of-pocket expense for a non-MSA health plan is as follows:
| Non-MSA health plan | Out-of-Pocket Expense |
| INDIVIDUAL | $1,500.00 |
| Total Aggregate for the year | $1,500.00 |
|---|---|
| FAMILY | |
| First person using coverage | $1,500.00 |
| Second Person using coverage | $1,500.00 |
| Third Person using coverage | $1,500.00 |
| Fourth Person using coverage | -0- |
| Total Aggregate for the year | $4,500.00 |
A complete explanation of individual and aggregate out-of-pocket expenses is located in Definitions.
Out of Pocket Expenses: MSA Qualified Plan
The Family Deductible in an MSA Qualified Plan applies to all members of the family collectively . There is no coinsurance on this particular plan if you use a member hospital. You would be hard pressed to find a hospital that is NOT part of this particular company's network.
The Family MSA policy DOES NOT have a deductible per individual. Your family must accrue $4,650.00 in covered medical expenses before the coverage is triggered. Unlike the non-MSA qualified plan, eligible medical expenses for the entire family are credited towards the one deductible. In the non-MSA plan, three individual deductibles have to be met before the deductible is waived for other family members.
The maximum annual out-of-pocket expense for an MSA Qualified Health Plan is as follows:
| MSA Health Plan | Out-of-Pocket Expense |
| INDIVIDUAL | $4,650.00 |
| FAMILY aggregate) | $4,650.00 |
WAIT A MINUTE.....With a higher deductible plan, you would think that you would assume a much bigger part of the risk. However, as you can see, the Aggregate Out-of-Pocket Expense for the Family MSA qualified plan is only $150.00 more than the lower deductible, non-qualified plan. In fact, the total Aggregate Out-of-Pocket Expense would be lower with an MSA Qualified plan if the non-qualified plan had a $1,000.00 deductible!
The higher deductible on an MSA Qualified plan does not lead to financial catastrophe if many people become ill or injured in your Family at the same time.
Of course, one of the biggest differences between a MSA qualified plan and a traditional health insurance plan is the premium. Your premium for a MSA qualified plan is considerably less than the premium for a traditional health insurance policy.
Also, the costs below the deductible and coinsurance can be paid with pre-tax dollars from the Medical Savings Account. Complete details on maximizing your savings and minimizing your costs are contained in the Right Way to set up your MSA program.
For an MSA program tailored to you and your family please see Request a Quote or give us a call at 847-699-6590.
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