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Choosing the Right Medical Plan

Let’s look at a few scenarios to show the cost comparison of the medical plans NYU offers based on three fictitious scenarios. You can estimate your personal medical expenses for the year by using the Benefits Resource Center’s online decision support tools. The tools allow you to estimate medical expenses specific to your family’s needs, compare the plans offered and project what your annual cost for each plan will be.

1 JenniferJennifer is single, has no children, earns $65,000 a year, and lives in New York. She doesn’t anticipate any major health care expenses in 2018 and wants a plan where her paycheck contribution will be low. Jennifer will see her in-network doctor for her regular preventive care visit and anticipates a couple of doctor and specialist visits for the year.

Jennifer’s estimated total cost under each medical option assuming she elects Employee Only coverage.

• One annual preventive care visit

• Two primary care doctor visits

• Two specialist visits

HDHP with HSAUHC Choice Plus Advantage Plan

UHC Choice Plus Value Plan

Annual preventive care visit $0 $0 $0

Two In-network primary doctor visits (in-network primary doctor discount rate of $80 per visit)

$160 ($80 x 2) $60 ($30 copay x 2) $60 ($30 copay x 2)

Two In-network specialist visits (in-network specialist doctor discount rate of $90 per visit)

$180 ($90 x 2) $80 ($40 copay x 2) $80 ($40 copay x 2)

Jennifer’s total out-of-pocket cost for services $340 $140 $140

Jennifer’s annual medical plan payroll contribution $600 $1,212 $720

NYU Contribution to HSA $250 N/A N/A

Jennifer’s total cost (services plus payroll contributions) minus NYU’s HSA contribution

$690 $1,352 $860

Although it’s additional money out of her paycheck, the tax-free contribution lowers her taxable income and could mean approximately $310 in tax savings (assuming a 25% federal tax rate and a 6% state tax rate). What’s more, the earnings and interest are tax-free, as are the withdrawals when she uses savings from the account for qualified healthcare expenses!

Note: State tax savings do not apply for New Jersey residents.

Jennifer’s End Result

Jennifer’s least expensive option is the HDHP with HSA. She is paying the lowest premium out of her paycheck for medical insurance, and she’s getting the benefit of NYU’s $250 contribution to the Health Savings Account, which she can use to pay her out-of-pocket expenses or carry the balance forward to use toward future health care expenses.

➔ Jennifer may consider: Contributing $1,000 to her HSA.

James is married, has two children in middle school, earns $85,000 a year, and lives in New York. He includes his wife in the medical coverage offered by NYU so he elects the Employee + Spouse + Child(ren) coverage level. James and his wife are both healthy but anticipate each may need one sick visit to their in-network primary care doctor and their specialist. Their children are typical kids — they get sick a few times a year and will require a few visits to the doctor, filling of prescriptions, and two trips to an urgent care facility when their doctor is not available.

2 JamesJames’ estimated total cost under each medical option.

• Two well-child exams

• One well-woman (preventive care) visit

• One well-man (preventive care) visit

• Two primary care doctor visits

• Four pediatric visits

• Six generic prescription drugs, filled at the pharmacy

• Two Urgent Care visits

• Two Specialist visits



Annual preventive care visit:• Two-well child exams•One well-woman exam•One well-man exam

$0 $0 $0

Two primary doctor visits in-network $160 ($80 x 2) $60 ($30 copay x 2) $60 ($30 copay x 2)

Four pediatric visits in-network

$320 ($80 x 4) $120 ($30 copay x 4) $120 ($30 copay x 4)

Six generic drugs, bought at the pharmacy $90 ($15 x 6) $60 ($10 copay x 6) $60 ($10 copay x 6)

Two visits to an Urgent Care Facility in-network $200 ($100 x 2) $70 ($35 copay x 2) $70 ($35 copay x 2)

Two specialist visits in-network $180 ($90 x 2) $80 ($40 copay x 2) $80 ($40 copay x 2)

James’ total out-of-pocket cost for services $950 $390 $390

James’ annual medical plan payroll contribution $3,684 $7,200 $5,280

James’ total cost (services plus payroll contributions) $4,634 $7,590 $5,670

James’ End Result James’ least expensive option is the HDHP with HSA. He is paying the lowest premium out of his paycheck for medical insurance, and even though he pays for the medical services, his total cost is still lower. In addition, if James chooses to make pretax contributions to his HSA equal to the plan’s family deductible of $3,200, he’d save an additional $992 in taxes. He can use his HSA funds to pay for his total out-of-pocket expenses for the year and still have $2,250 in his account that will roll over into the following year.

➔ HSA tax savings = $992

$800 federal tax, assuming a 25% tax rate

$192 for state tax, assuming a 6% tax rate(Waiver of state tax on HSA contributions is not available to New Jersey residents.)

3 Linda



Annual preventive care visit:•One well-woman exam•One well-man exam

$0 $0 $0

Four primary doctor visits in-network $320 ($80 x 4) $120 ($30 copay x 4) $120 ($30 copay x 4)

One in-network hospital surgery – $40,000 $2,880 remaining of the

$3,200 family deductible + 10% of the remaining cost

until the out-of-pocket maximum is reached

($6,000 out-of-pocket max)

$400 deductible, plus $1,480 in coinsurance (10%)

of the remaining cost. Linda has now reached her in-network out-of-pocket

maximum in this plan.($2,000 out-of-pocket max)

$500 deductible, plus $2,800 in coinsurance

(20%) of the remaining cost. Linda has now reached her in-network out-of-pocket

maximum in this plan.($3,500 out-of-pocket max)

Two specialist visitsin-network

$0 (out-of-pocket maximum reached)



Six generic drugs, bought at the pharmacy


$60 ($10 copay x 6)

$60 ($10 copay x 6)

Two brand name drugs $0 (out-of-pocket maximum reached)

$70 ($35 copay x 2)

$70 ($35 copay x 2)

Twenty Physical Therapy Visits




Linda’s total out-of-pocket cost for services $6,000 $2,130 $3,630

Linda’s annual medical plan payroll contribution $3,372 $6,564 $5,028

Linda’s total cost (services plus payroll contributions)

$9,372 $8,694 $8,658

Linda’s estimated total cost under each medical option.

• One well-woman (preventive care) visit

• One well-man (preventive care) visit

• Four primary care doctor visits

• One in-network hospital surgery

• Two specialist visits

• Six generic drugs, bought at the pharmacy

• Two brand name drugs

• Twenty physical therapy visits

Linda is married, has two adult children, earns $130,000 a year, and lives in New York. Her children work and have their own healthcare coverage so she elects Employee + Spouse medical coverage. Linda and her husband each generally visit the doctor a few times a year and Linda has a planned surgery that will involve a $40,000 in-network hospital stay where she will subsequently need to see specialists and physical therapists.

Linda’s End Result Although Linda’s total cost is the highest with the HDHP, consider if she contributed $6,000 (her total out of pocket maximum for the year) to her HSA, her approximate tax savings would be $2,040, which in total would make the HDHP the lowest cost option.

➔ HSA tax savings = $2,040

$1,680 federal tax, assuming a 28% tax rate

$360 for state tax, assuming a 6% tax rate(Waiver of state tax on HSA contributions is not available to New Jersey residents.)

choosing the right medical plan - new york university · choosing the right medical plan let’s...

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