Covering child for health insurance to get extra benefits

[Annie7]

I am wondering which is a better option to choose. Can you please help?

I have a 22Y child that I can enroll under my Health insurance. He has coverage via his employer and has chosen it (wants to be independent). My benefits doesn't ask if child has coverage elsewhere (they ask for spouse and has a surcharge if they do). 

The additional cost to insure him is $600 for the year. The deductible goes from $3000 for individual to $6000 for ind+child. These are the cons of insuring him under my insurance (he will continue to be insured under his own insurance).

The advantage of insuring him: I get to add an additional $3900 into my HSA since it's family ($7750 vs $3850). My company will make an after tax contribution of $2400 (ind+child) vs $1200 (ind) to an account which I can use to reimburse myself for various things including gym memberships, cell phone expenses, parent plus or student loans, etc.

So, to get the additional $1200 company contribution and ability to contribute $3900 more to my HSA, is it worth spending $600 and increasing the deductible from $3000 to $6000?

[The Walk of the Penguin Mich]

Let him go on his own and be an adult.  

Being double covered with health insurance is more grief than you can imagine.  Double insuring (in my experience) means that each insurance thinks the other should pay, nobody pays and you wind up paying OOP for things that *should* be covered and aren’t in order to avoid getting sent to collections.   It requires a mess that required my state rep to settle, and while I got some of the money I paid back, I was still a out decent amount of money that I stopped trying to pursue as it got fed up with it. 

Won’t do it again.

[justme]

I have no idea on the answer, but if your kid's plan isn't an HSA eligible can you get the family HSA? Not sure how that works.

[haapai]

The increase in your deductible is the sticky wicket.  It would hurt to have to hit that $6000 deductible instead of the $3000 that you are used to.  On the other hand, everything in your post just screams that you have a healthy balance in your HSA which is a sign that you rarely hit the current $3K deductible. 

Otherwise, the math is a slam-dunk, at least according to the facts that you have presented.  The additional $1200 of after-tax contributions to your "various things account" easily covers the $600 of additional outlay, as long as you have a way of using that money.  That's just so overwhelming that it's hard to even consider the saved social security taxes or do calculations that involve marginal tax rates. 

I can't believe that you are looking at something so generous and have the creativity to see it. 

OTOH, it might be worth your time to map everything out for yourself and do all those calculations in order to figure out how good of a deal this is.  This will also be helpful if you discover that one of your numbers is off due to your child no longer being a minor. 

As for telling your son that you are carrying insurance on him -- I will not touch that. 

[minnesotapaintlady]

Oct 17, 2022 11:21:33 GMT -5 justme said:

I have no idea on the answer, but if your kid's plan isn't an HSA eligible can you get the family HSA? Not sure how that works.

Yes.  But her kid would not be able to open his own HSA and his expenses cannot be paid for with her HSA unless he is a dependent on her tax returns.  My oldest is double covered one HSA plan (mine) and one non-HSA plan (his dad's), so I've studied up on this one.

[haapai]

Anne7, listen to MPL.  She's good and she's smart.  You can learn a lot from what she is willing to tell you, and it may be very useful to you. 

OTOH, you need to get naked with each other regarding your income, AGI, and marginal tax rates.  I consider MPL a bit of a genius, but you need to know right off the bat that MPL has a very low cost of living, a remarkably low AGI, and quite a low tax rate.  None of these things that I'm saying about MPL are intended as any kind of shade on her, quite the contrary, but if they don't match your situation, your math may be quite different. 

Do the math for yourself. 

[minnesotapaintlady]

Oct 17, 2022 11:43:12 GMT -5 haapai said:

Anne7, listen to MPL.  She's good and she's smart.  You can learn a lot from what she is willing to tell you, and it may be very useful to you. 

OTOH, you need to get naked with each other regarding your income, AGI, and marginal tax rates.  I consider MPL a bit of a genius, but you need to know right off the bat that MPL has a very low cost of living, a remarkably low AGI, and quite a low tax rate.  None of these things that I'm saying about MPL are intended as any kind of shade on her, quite the contrary, but if they don't match your situation, your math may be quite different. 

Do the math for yourself. 

Wait. What?

I was just answering about whether or not she could have a family HSA.  No tax advice.  LOL

[Annie7]

Oct 17, 2022 11:14:12 GMT -5 The Walk of the Penguin Mich said:

Let him go on his own and be an adult.  

Being double covered with health insurance is more grief than you can imagine.  Double insuring (in my experience) means that each insurance thinks the other should pay, nobody pays and you wind up paying OOP for things that *should* be covered and aren’t in order to avoid getting sent to collections.   It requires a mess that required my state rep to settle, and while I got some of the money I paid back, I was still a out decent amount of money that I stopped trying to pursue as it got fed up with it. 

Won’t do it again.

Thanks Mich. A very good point.

[Annie7]

Oct 17, 2022 11:29:29 GMT -5 haapai said:

The increase in your deductible is the sticky wicket.  It would hurt to have to hit that $6000 deductible instead of the $3000 that you are used to.  On the other hand, everything in your post just screams that you have a healthy balance in your HSA which is a sign that you rarely hit the current $3K deductible. 

Otherwise, the math is a slam-dunk, at least according to the facts that you have presented.  The additional $1200 of after-tax contributions to your "various things account" easily covers the $600 of additional outlay, as long as you have a way of using that money.  That's just so overwhelming that it's hard to even consider the saved social security taxes or do calculations that involve marginal tax rates. 

I can't believe that you are looking at something so generous and have the creativity to see it. 

OTOH, it might be worth your time to map everything out for yourself and do all those calculations in order to figure out how good of a deal this is.  This will also be helpful if you discover that one of your numbers is off due to your child no longer being a minor. 

As for telling your son that you are carrying insurance on him -- I will not touch that. 

Haapai - yes, I have about $45K in my HSA - went down a bit because of the stock market (I invest most of what's in the HSA). However, now that I'm 50+ I might have more medical expenses. I plan on focusing on my health next year - I'm overweight and have a bit of a high blood pressure. I might go over the 3K but not meet 6K. 

Based on ACA, I can have my kids on my insurance until they turn 25. My oldest aged out last year. My numbers are correct.

Regarding telling my son - I would of course let him know. I tell my kids anything that impacts them - no secrets - they are adults and deserve to be told. I've told them that I carry $15K life insurance on them that my company provides free of charge when they are covered. That's something that will go away too now if I don't have them on my insurance.

[Annie7]

Oct 17, 2022 11:29:52 GMT -5 minnesotapaintlady said:

Oct 17, 2022 11:21:33 GMT -5 justme said:

I have no idea on the answer, but if your kid's plan isn't an HSA eligible can you get the family HSA? Not sure how that works.

Yes.  But her kid would not be able to open his own HSA and his expenses cannot be paid for with her HSA unless he is a dependent on her tax returns.  My oldest is double covered one HSA plan (mine) and one non-HSA plan (his dad's), so I've studied up on this one.

A very good point MPL. This is probably going to be the tipping point. He will want to build up his own HSA. So, I should let him do that

[Annie7]

Oct 17, 2022 11:43:12 GMT -5 haapai said:

Anne7, listen to MPL.  She's good and she's smart.  You can learn a lot from what she is willing to tell you, and it may be very useful to you. 

OTOH, you need to get naked with each other regarding your income, AGI, and marginal tax rates.  I consider MPL a bit of a genius, but you need to know right off the bat that MPL has a very low cost of living, a remarkably low AGI, and quite a low tax rate.  None of these things that I'm saying about MPL are intended as any kind of shade on her, quite the contrary, but if they don't match your situation, your math may be quite different. 

Do the math for yourself. 

Haapai,

I agree. MPL is very impressive in what she's done/doing with her money. I am on the other end of the spectrum in many ways - I make more, have less saved, high cost of living, etc. I can only admire her 

[minnesotapaintlady]

Oct 17, 2022 12:26:23 GMT -5 Annie7 said:

Oct 17, 2022 11:29:52 GMT -5 minnesotapaintlady said:

Yes.  But her kid would not be able to open his own HSA and his expenses cannot be paid for with her HSA unless he is a dependent on her tax returns.  My oldest is double covered one HSA plan (mine) and one non-HSA plan (his dad's), so I've studied up on this one.

A very good point MPL. This is probably going to be the tipping point. He will want to build up his own HSA. So, I should let him do that

If his plan is an HSA eligible plan he can open his own HSA even if you contribute to a family HSA.  It's just that he can't have one at all if his plan is not HSA eligible and can't use yours either if he's not a tax dependent.

[haapai]

Oct 17, 2022 12:12:39 GMT -5 minnesotapaintlady said:

Oct 17, 2022 11:43:12 GMT -5 haapai said:

Anne7, listen to MPL.  She's good and she's smart.  You can learn a lot from what she is willing to tell you, and it may be very useful to you. 

OTOH, you need to get naked with each other regarding your income, AGI, and marginal tax rates.  I consider MPL a bit of a genius, but you need to know right off the bat that MPL has a very low cost of living, a remarkably low AGI, and quite a low tax rate.  None of these things that I'm saying about MPL are intended as any kind of shade on her, quite the contrary, but if they don't match your situation, your math may be quite different. 

Do the math for yourself. 

Wait. What?

I was just answering about whether or not she could have a family HSA.  No tax advice.  LOL

Shuddup and let me say nice things about you. 

Ever since I got here, about 20 years ago, albeit on various incarnations of this board, you have been amazingly inspiring and just insanely candid about how your money worked.  You have no idea how much light you have shed on my path.  I make less than you and have no children, and therefore can't really consider you a peer, but you've done more to open my eyes to what I can do with what little money I earn or have than anyone else.  FWIW, I gross a whole lot less than you. 

You've inspired me to do my own math, and it is just amazing what happens when a woman does her own math for herself. 

[The Walk of the Penguin Mich]

Oct 17, 2022 12:16:12 GMT -5 Annie7 said:

Oct 17, 2022 11:14:12 GMT -5 The Walk of the Penguin Mich said:

Let him go on his own and be an adult.  

Being double covered with health insurance is more grief than you can imagine.  Double insuring (in my experience) means that each insurance thinks the other should pay, nobody pays and you wind up paying OOP for things that *should* be covered and aren’t in order to avoid getting sent to collections.   It requires a mess that required my state rep to settle, and while I got some of the money I paid back, I was still a out decent amount of money that I stopped trying to pursue as it got fed up with it. 

Won’t do it again.

Thanks Mich. A very good point.

The other question might be that if your insurance company (and employer) finds out that your son can be covered elsewhere, YOU might be penalized.  Companies are cracking down on things like this, usually it is with spouses but I can’t imagine kids will be far behind.

[Annie7]

Oct 17, 2022 13:22:59 GMT -5 minnesotapaintlady said:

Oct 17, 2022 12:26:23 GMT -5 Annie7 said:

A very good point MPL. This is probably going to be the tipping point. He will want to build up his own HSA. So, I should let him do that

If his plan is an HSA eligible plan he can open his own HSA even if you contribute to a family HSA.  It's just that he can't have one at all if his plan is not HSA eligible and can't use yours either if he's not a tax dependent.

Agree about when he can open his own HSA - only if he has a HDHP (which I believe he has). He is definitely not going to be my tax dependent.

But, I cannot contribute to a family HSA if I insure only myself - I only get the option to contribute the max for an individual. 

If I insure him (thus he will be double insured) and I contribute to a family HSA, then can he open a HSA (since his is also HDHP) and contribute? Can he use his HSA for his medical expenses (not worrying about saving for later right now)?

[Annie7]

Oct 17, 2022 14:13:49 GMT -5 The Walk of the Penguin Mich said:

Oct 17, 2022 12:16:12 GMT -5 Annie7 said:

Thanks Mich. A very good point.

The other question might be that if your insurance company (and employer) finds out that your son can be covered elsewhere, YOU might be penalized.  Companies are cracking down on things like this, usually it is with spouses but I can’t imagine kids will be far behind.

Mich - yes, they ask that for spouses but not for kids yet. When they do, then I can stop insuring him if I decide to continue to insure him.

[minnesotapaintlady]

Oct 17, 2022 14:15:38 GMT -5 Annie7 said:

Oct 17, 2022 13:22:59 GMT -5 minnesotapaintlady said:

If his plan is an HSA eligible plan he can open his own HSA even if you contribute to a family HSA.  It's just that he can't have one at all if his plan is not HSA eligible and can't use yours either if he's not a tax dependent.

Agree about when he can open his own HSA - only if he has a HDHP (which I believe he has). He is definitely not going to be my tax dependent.

But, I cannot contribute to a family HSA if I insure only myself - I only get the option to contribute the max for an individual. 

If I insure him (thus he will be double insured) and I contribute to a family HSA, then can he open a HSA (since his is also HDHP) and contribute? Can he use his HSA for his medical expenses (not worrying about saving for later right now)?

Yes.  As long as he has only a HDHP (or two) and is NOT a dependent, he can have his own HSA.  Even if he didn't sign up for his work plan and was just on yours but not a dependent he could have his own individual HSA while you had a family one.  The only thing that would keep him from being able to have one is if his workplace plan was not HSA eligible.

[bean29]

I have to make the same decision soon.  My DD will be 26 in April.  She is working full time, and is eligible for benefits.  She is taking her last class to finish her degree this semester.  For the summer session when she was doing her Capstone Paper she reduced down to something like 26 hours, so being on my insurance, she did not have to worry about having enough hours to maintain her insurance and finish her classes.

I asked her to enroll in her insurance starting 1/1/2023 and she wants me to keep her on my insurance until her birthday in April.  I will have to review the two plans when the info is out and decide what the best way to go is.  I am in an HSA plan.  I would prefer to get out of it.  It used to be a good deal, but now it seems as though the deductibles are higher, there is also co-insurance etc.  Between the 3 of us, DD, DH and myself, we seem to hit the deductible.  

I told DS not to take the HSA plan, and will tell DD the same.  If they just have a few minor issues here and there, maybe only one or two doctor visits during the year, I feel it is better if they just have to pay the co-pay instead of the entire amount OOP.

DD was spoiled, as long as she was on my insurance, I paid her Dr bills too.  I did not hit my HSA for the $$ though b/c she has not been a dependent for many years already.  

I do not have my HSA invested in the stock market yet.  It is an ongoing goal I have not yet gotten to.

[minnesotapaintlady]

Oct 17, 2022 14:59:22 GMT -5 bean29 said:

I told DS not to take the HSA plan, and will tell DD the same.  If they just have a few minor issues here and there, maybe only one or two doctor visits during the year, I feel it is better if they just have to pay the co-pay instead of the entire amount OOP.

It depends. On our plan a few minor visits a year is definitely better going with the HSA.  The HSA is $3400/year cheaper and the company kicks $1000 into the HSA as an added perk.  So you'd have to have $4400 in bills before you even paid what you would have in more insurance costs.  The high expenses you're better off HSA too.  You hit your $6750 and then everything is free.

It's the middle that can get murky...

[bean29]

Oct 17, 2022 15:10:47 GMT -5 minnesotapaintlady said:

Oct 17, 2022 14:59:22 GMT -5 bean29 said:

I told DS not to take the HSA plan, and will tell DD the same.  If they just have a few minor issues here and there, maybe only one or two doctor visits during the year, I feel it is better if they just have to pay the co-pay instead of the entire amount OOP.

It depends. On our plan a few minor visits a year is definitely better going with the HSA.  The HSA is $3400/year cheaper and the company kicks $1000 into the HSA as an added perk.  So you'd have to have $4400 in bills before you even paid what you would have in more insurance costs.  The high expenses you're better off HSA too.  You hit your $6750 and then everything is free.

It's the middle that can get murky...

We don't have co-pays on our insurance, although there is a conventional plan and they did not give me the option to "Choose" which plan I wanted to be in for the last few years.  We get no contribution to our HSA from the company.  DS's choices were confusing.  I told him to ask questions but I don't think he did.  It is his choice to live with at this point.

DD works for a much larger company.  I know they have a very good 401K match.  I looked at the Health insurance choices a while back, asked DD some q's but she never followed through.  She will figure it out, once she has no option to use the bank of Mom & Dad.

[alabamagal]

You can accuse me of spoiling my kids, but I kept them on my plan until they were 26. At the time, I had a good PPO plan, and it was very low cost. Also the company I worked for had family plan that was same cost no matter how many. I always intended to keep youngest on my plan, and when youngest was in college my other kids were still under 26, so if I was paying for youngest, the other 2 were no extra cost. So even when they had jobs, it would save them money to not have to pay when they were “free” on mine. I covered him 2 more years, his initial salary was not great. I stopped covering him when I lost my job and didn’t want to pay COBRA, but by then he could easily afford his own coverage.

[Deleted]

Oct 23, 2022 13:18:18 GMT -5 alabamagal said:

You can accuse me of spoiling my kids, but I kept them on my plan until they were 26. At the time, I had a good PPO plan, and it was very low cost. 

I kept DS on mine for awhile, too. He started out PT at a company that eventually hired him FT with health insurance, after which he went on his employer's plan. He was just getting started as a young adult and it was one thing I could do for him.

As mich mentioned you do need to look at co-ordination of benefits. Insurers are getting a lot pickier about how they share a claim with other insurers and even though they may cover you may end up recovering less than you expected.

[minnesotapaintlady]

My oldest is double covered under mine and his dad's insurance.  It's never really been a problem, but they are both Blue Cross plans (one is TX and one is MN).  He's welcome to stay on until he's 26 with both as it doesn't cost any more to have him on the family plan anyhow.  His younger brother though...not sure what will happen with him because I kind of want to retire the year he graduates high school. 

[Opti]

Oct 23, 2022 19:10:51 GMT -5 minnesotapaintlady said:

My oldest is double covered under mine and his dad's insurance.  It's never really been a problem, but they are both Blue Cross plans (one is TX and one is MN).  He's welcome to stay on until he's 26 with both as it doesn't cost any more to have him on the family plan anyhow.  His younger brother though...not sure what will happen with him because I kind of want to retire the year he graduates high school. 

Medicare part K? 

Hey someday there might be an optional Medicare piece for parents whose kids are still dependent on them.

[Annie7]

Oct 23, 2022 13:18:18 GMT -5 alabamagal said:

You can accuse me of spoiling my kids, but I kept them on my plan until they were 26. At the time, I had a good PPO plan, and it was very low cost. Also the company I worked for had family plan that was same cost no matter how many. I always intended to keep youngest on my plan, and when youngest was in college my other kids were still under 26, so if I was paying for youngest, the other 2 were no extra cost. So even when they had jobs, it would save them money to not have to pay when they were “free” on mine. I covered him 2 more years, his initial salary was not great. I stopped covering him when I lost my job and didn’t want to pay COBRA, but by then he could easily afford his own coverage.

I did the same with my older son. I don't call it spoiling - just being prudent with the family's money. Since it was free to insure ODS when I still had to insure YDS, he stayed on my insurance until he turned 25 and couldn't stay on mine anymore. With YDS, it was similar premium whether he went with his own or added to mine. He chose to be independent and wanted his own. I was ok to carry him for a bit longer.

[bean29]

I am looking at benefits with DD.  I have so far only looked at the programs DH covers vs. her benefits.  Decided she should take her Dental insurance on 1/1/2023 as it is better than ours and it is cheaper

ST Disability is 458.64/yr.  $17.64 per pay period.  She did not think it was worth it b/c you have to be out 30 days to get coverage.  I don't remember exactly how my Maternity benefits worked.  I remember when I had my first in 1993 I got 60% of my pay, but not sure if I had to wait 30 days or not.  I think I did, b/c remember we had savings and had planned for the reduced income.  I was out 8 weeks if I remember correctly.  With my DD in 1997 they had changed our plan and we got full pay.  I think it was for all the time off.  They made the non-exempt and exempt plans the same.  So, do I push DD to take STD or let it go?  I don't have STD b/c my employer does not offer it.  Truthfully my checks are only about $50/wk, b/c everything is going to 401K/HSA/Taxes, so if we lost my income, it would not hurt current picture, just the Long term one.

DD does not plan on children in the near future, and she has an IUD.  Do you think she should elect Short Term Disability?

I have her asking  HR if she can elect the dental and stay on our Health insurance until her birthday, then get in their plan in April as a life event.  I also told her to ask if she can start payroll deduction for an HSA and where it needs to be (Their bank, or can she choose her own).  Her vision and dental are cheaper, but I think she can get glasses under our plan and we will be ahead of what we will pay, then she can get contacts under her company plan after that one starts.

[pulmonarymd]

Many reasons she could be out over 30 days besides childbirth. Surgery, fractures, severe illness such as pneumonia(Covid for example), cancer, car accidents. Seems to be a small price for some protection against shit happens events

[andi9899]

Oct 17, 2022 11:14:12 GMT -5 The Walk of the Penguin Mich said:

Let him go on his own and be an adult.  

Being double covered with health insurance is more grief than you can imagine.  Double insuring (in my experience) means that each insurance thinks the other should pay, nobody pays and you wind up paying OOP for things that *should* be covered and aren’t in order to avoid getting sent to collections.   It requires a mess that required my state rep to settle, and while I got some of the money I paid back, I was still a out decent amount of money that I stopped trying to pursue as it got fed up with it. 

Won’t do it again.

This. It really is more trouble than it's worth.

[anciana]

bean29, I carry short term disability for all the reasons that pulmonarymd listed, it is a small amount that provides a peace of mind for me. I also have to wait some time until it kicks in, so I make sure to save some PTO to cover the in between time.
Make sure your DD not only checks but positively confirms that she can get health insurance from a different place than dental/visual as I've often heard that is not possible. 

[azucena]

Bean - I'd tell her to get it.  FWIW, DH was still a college student when his chronic illness started out of nowhere, so he didn't have STD options.  He was 'lucky' to qualify for soc sec disability which can be hard to prove esp for younger folks. And the soc sec amt was determined by his past soc sec records.  Luckily he'd worked quite a bit more than most in his teen and college years.  Most young workers won't have as much salary history as he did for the soc sec amt calculation.

Having disability insurance is a cost of successfully adulting.  She also might as well get used to paying it from the beginning.