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Expecting? One Couple’s Success Story

A baby. Allen and Nicole were so excited to add another child to their family of three. But babies take a lot of planning. Nine months of planning. And Allen knew they had exactly that to figure out how to pay for the birth. Allen and Nicole have had a high-deductible health care plan for a couple of years, so they weren’t rookies.
Expecting

Like many of us, Allen’s benefits plan or his insurance carrier had changed every year as his employer worked to find affordable health care for his company. Allen’s deductible had increased every year and so had the cost per pay period. His deductible is $12,000 for the year. The upside, Allen’s company offers a Health Savings Account (HSA) that he has participated in for the last four years. Concerned about the price of health care for his family, Allen and Nicole had taken advantage of the HSA. Allen’s company does not contribute to his HSA. However, once the family reached $3,000 in out-of-pocket expenses, the company would contribute 50% of every additional medical bill. When Allen and Nicole reached $3,000, they began to pay the medical bills in full, and then be reimbursed half up to the max deductible of $12,000.

Allen considered it a success the way he and Nicole were able to plan and save. They budgeted toward the whole deductible.

With the baby on the way, Allen started contributing an extra $250 per pay period or $500 a month into the account.

This way he was able to take advantage of the tax benefit. Babies are expensive but worth every penny. Allen considered it a success the way he and Nicole were able to plan and save. They budgeted toward the whole deductible. Based on the delivery of their first child, they knew they were going to face at least $9,000 out-of-pocket. They did the math and figured out what they would need to save for the next nine months. Plus, they tried to look ahead at savings they would accrue. Once the baby arrived, all wellness visits would be covered 100% by their health care benefits.

Sounds complicated, but Allen and Nicole learned it just takes planning. Allen used his benefit provider’s website to help break down the out-of-pocket costs and the deductibles for his plan. His other advice is to keep close tabs on the balance of your HSA. Every plan is different.