Imagine that a friend tells you her employer has given her the choice of health insurance plans. She must choose between a PPO insurance plan with a flexible spending account (FSA) that has a limit of $2500 OR high-deductible plan with a health savings account (HSA) that her employer will contribute $1000 to. Your friend has a spouse and two children that will be on the plan. Her premiums on the high-deductible plan will be $1000 less per year than on the other plan. However, the deductible for the regular PPO plan is $1000 per individual and $3000 family, and on the high-deductible plan is $2000 individual and $4000 family.
1. In your first post:
• Explain which plan you would tell your friend to choose and why.
• Explain which you would you rather have—a flexible spending account or health savings account, and why.
• If you were an employer, would you offer both, or only one? Describe the benefits of your choice.2. Post responses to at least two classmates, arguing against their selection for your friend or their choice of FSA or HSA. Support your opinion with facts.
Student 1:
Hey everyone,
I would tell her to choose the PPO plan with the FSA. She will have to pay more out of pocket each month, but her overall medical expenses will be much less. PPO also has more access to a variety of providers and services. With the PPO, it is the better choice for someone who will be visiting the doctor more often, which is going to happen with children. With a PPO, you can choose your own doctor and often do not need a referral to see specialists, so it is just overall the better option. If it were just her by herself, then the high deductible plan would be better, because it is best for people who do not visit the doctors often. I also think the FSA would be best because you can use it toward your children and even child care while working. The FSA does not roll over like the HSA would, but with a family of four, you are probably going to use up your FSA anyways and can find many ways to spend that money. HSA’s may also require a maintenance fee in order to keep it up and has a max of around $7,000 for a family. An HSA account also requires that you stay on top of your receipts, which is probably hard to do with two young children.
If I were the employer, I would probably choose to offer both. Like I mentioned above, the PPO plan with the FSA is better for families and the HD plan is better for people who do not frequent the doctor and are young and single. I would have many different types of people working for me, so it is not really my choice to say which one is better for my employees. I would like them to have the option to choose which one is best for them.
https://www.singlecare.com/blog/hdhp-vs-ppo/
Student 2:
Hello,
I would inform my friend to chose the PPO plan over the HSA plan; a PPO plan will benefit her and her family better than a HSA plan would. However a HSA plan can help you save money when it comes to health care needs but a PPO plan offers more providers within the network that you are able to chose from. I would explain to her that because she does have children and they tend to get sick or hurt more often, have the flexible savings account available would be best because she would have up to $2500 to use for her out of pocket costs.
Personally, I would pick the PPO plan as I do not go to the doctor often but I have built a relationship with my provider and would have to switch if they were out of network. I also do not have health insurance currently but in the past I picked the plan that was PPO and had a FSA paired with it because it was the best option for myself. When I signed up, I had a limit of $3500 on the card and I used about $750 in the first month of having it due to unexpected medical issues. But you are also able to use your FSA card for any other health care needs; even dental. Which is also why I picked it because it was universal within the field.
If I had to pick which policy to offer my employees, I would pick PPO plans with the options of having a FSA attached. Having a PPO plan is the most common within the medical and dental field and it would be the best option for my staff to stay within the same health care providers. I would offer a gold, sliver and bronze ppo plan as well as a gold, sliver and bronze PPO + FSA option; they will be able to pick which best suits them an their families without having to break the bank.
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