What do I do with health insurance?

When it comes to group health insurance options, it can be difficult to choose from the myriad of options.  Typically, the options can be broken down into two separate categories: high-deductible plans and low-deductible plans.

High-deductible plans have a lower monthly premium but a higher deductible, just as the name suggests.  One major benefit to these plans is that participants have the option to contribute to an FSA (flexible spending account) or HSA (health savings account).  Each of these accounts allow for tax-deductible contributions, and the funds are not taxed as long as they are used for qualified medical expenses.  In some instances, employers also make contributions to the accounts.

Low-deductible plans have a higher monthly premium but a lower deductible.  With these plans, participants are typically not allowed to contribute to a tax-advantaged medical account. 

Making this decision ultimately comes down to your individual situation.  If you are comfortable with the liquidity and savings that you have on hand, the higher-deductible plan is likely a better option.  If you feel confident that you will be incurring major medical expenses throughout the year, the low-deductible plan may be better for you.  Be sure to discuss these options with your trusted advisor.

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Miranda Power