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I live in Ca small business employees (8 full time) 20

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employees total. We have a...
I live in Ca small business employees (8 full time) 20 employees total. We have a 100percent employer paid low deductible health insurance through blue cross of ca. I was told it’s not possible to upgrade or change I order to get a high deductible health plan. This is a HMO Btw . I like the idea of a HSA for tax purposes . Any ideas if this is true ?
Submitted: 4 months ago.Category: Finance
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Answered in 4 days by:
12/15/2017
Financial Professional: socrateaser, Attorney replied 4 months ago
socrateaser
socrateaser, Attorney
Category: Finance
Satisfied Customers: 39,769
Experience: Retired
Verified

Hello,

A high deductible health plan means that the employee is contributing his or her own pretax wages/salary to the HSA account. The effect would be to reduce the employee's net wages. Whereas, a 100% employer paid plan maintains the employee's wages while simultaneously providing entirely tax free health care benefits (except for copayments, deductibles, etc.).

The point is that the employee in your scenario would be substituting their own wages/salary for the employer's contribution -- unless the employer were to agree to pay over the premiums to the employee as a matching fund for the HSA account.

The collateral problem here is that with a very small employee pool, by breaking up the pool into different plans, the cost of insurance for the remaining participants in the 100% plan would increase. This is nearly certain to be the reason why the emplloyer is resisting any change.

That said, the employer's insurance agent can provide the numbers which would be required to have two different health care plans. Perhaps you can get your employer to allow you to discuss the issue with the insurance agent to see if it makes economic sense. My bet is that it doesn't, but maybe the insurer can make it work.

Hope this helps and thanks for using Justanswer!

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