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Welcome to the latest episode of the Physician Cents Podcast, where we explore complex financial topics tailored specifically for physicians. Whether you're a medical student, resident, fellow, or attending physician, you're going to find valuable insights that can help you increase your financial IQ, further your financial journey, and improve your overall well-being. Hosted by Chad Chubb and Tyler Olson, let’s dive in!
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Open enrollment is a critical period for physicians. Whether you’re just entering or exiting this window, it’s crucial to make savvy decisions about your health insurance and associated benefits. This guide aims to provide clarity on essential aspects such as health insurance, HSAs, and various plan metrics to consider.
Your choice of health insurance significantly impacts both your medical and financial situation. The right plan can save you thousands of dollars and offer peace of mind, ensuring that you and your family have the appropriate medical support without financial stress.
Begin by assessing your historical healthcare needs:
Understanding your past and current healthcare needs allows you to filter available health insurance policies, ensuring that you select the most suitable plan.
An HDHP is a plan with lower premiums and higher deductibles. It is primarily appealing because it qualifies you for an HSA, offering potential tax benefits and a way to save for future medical expenses.
These plans typically feature higher premiums but lower out-of-pocket costs. They may be more suitable for those who anticipate regular doctor visits or ongoing medical treatments.
Physicians must thoroughly evaluate their health needs to make the right insurance choice:
When comparing health insurance plans, focus on these crucial metrics:
An HSA is a tax-advantaged savings account available to those with an HDHP. It allows you to save pre-tax dollars, grow your investments tax-free, and withdraw funds tax-free for qualified medical expenses.
To qualify for an HSA, you need an HDHP adhering to specific criteria. Ensure your plan meets these standards, often labeled as HSA-qualified or HDHP.
For 2024, the contribution limits are:
The HSA offers triple tax benefits:
Use the HSA as a medical expense emergency fund. This can provide a cushion in case of unexpected health costs, ensuring you’re financially prepared.
Some employers contribute to your HSA, reducing your burden. Remember, this amount counts toward your annual limit.
Choose a health plan that aligns with your comfort level regarding risk. If high out-of-pocket costs worry you, a traditional plan might be better despite higher premiums.
Ensure you have savings to cover the high deductible if you choose an HDHP. Your HSA can act as this cushion, but it’s crucial to have additional emergency funds.
Consider your family’s health history and possible future medical issues. Choose a plan that offers flexibility and coverage for any anticipated needs.
Suppose a physician with no significant health issues chooses an HDHP: They benefit from lower premiums and can maximize HSA contributions, investing these funds for future use.
Conversely, a physician with ongoing medical treatments and specialist visits might opt for a traditional plan to minimize out-of-pocket costs.
Compare plans by adding premiums and out-of-pocket maximums. For instance:
Analyzing these costs helps you understand the true financial impact and choose wisely.
If both you and your spouse have HSA plans, remember you can’t double-dip. Your combined contribution must not exceed the annual limit.
Don’t forget to include employer contributions when calculating your annual HSA limit. This ensures you don’t exceed the allowed amount.
Track HSA contributions carefully, especially if you switch employers mid-year. Ensure the new total across all contributions remains within the IRS limits.
Academic medicine often offers lower premiums with excellent coverage, making HDHP and HSA strategies particularly attractive.
Take full advantage of the comprehensive benefits offered, optimizing your out-of-pocket costs and maximizing employer HSA contributions.
Without employer backing, expect higher health insurance premiums. Invest in a thorough review of available plans to find suitable options within your budget.
Post age 65, your HSA functions similarly to an IRA. Withdrawals for non-medical expenses incur only ordinary income tax, making it a versatile savings tool for retirement.
Keep records of medical expenses paid out-of-pocket, allowing you to reimburse yourself tax-free from the HSA later. This strategy maximizes your HSA’s growth potential.
Focus on substantial expenses rather than small receipts. Examples include major medical procedures, surgeries, or large prescription bills.
Employer contributions count toward your annual HSA maximum, so adjust your personal contributions accordingly to stay within limits.
Utilize all available benefits, from direct HSA contributions to indirect bonuses, reducing your financial burdens and optimizing insurance value.
Ensure the chosen plan meets your unique healthcare needs while also fitting within your financial strategy.
Beyond health insurance, consider retirement plans, group disability insurance, paid time off policies, and life insurance options during open enrollment.
Maximize contributions to retirement plans to take full advantage of employer matches and tax benefits.
Ensure adequate coverage to protect against income loss due to disability.
Understand how your PTO accrual and usage policies work, leveraging them effectively.
Review any life insurance offered by your employer, ensuring it meets your needs and consider supplemental policies if necessary.
Plan for worst-case health scenarios to mitigate financial risks. The right insurance and well-utilized HSA can be crucial to maintaining financial stability.
Health insurance should not be an isolated decision but part of your larger financial strategy, ensuring long-term financial wellbeing.
Make it a habit to review your insurance annually, keeping abreast of changes in policies and contribution limits.
Stay informed on updates to ensure you are maximizing benefits and staying compliant with current regulations.
This comprehensive guide arms you with the knowledge needed to navigate open enrollment with confidence, maximizing benefits and minimizing costs. Whether you're a seasoned attending physician or just starting your residency, making informed decisions now will greatly impact your financial and medical wellbeing.
The best of the best list is a paid sponsorship, but these are professionals/companies that Tyler and Chad collaborate with within their own practices or have been vetted to earn a spot this list. By supporting our sponsors, it allows Chad & Tyler to dedicate more time to you and the Physician Cents community. If you ever have a question (or not a great experience, which we don’t expect!) about a sponsor, please let us know. We call it the “best of the best” for a reason, and we will maintain that standard for our listeners & viewers.
This information is for general purposes only. This information is not intended to be a substitute for specific professional financial, tax, or legal advice, as individual circumstances vary. Please see a financial professional, CPA, and/or an attorney in regards to your own individual situation.
Wealthkeel’s Advisory Services and Financial Planning offered through Vicus Capital, Inc., a Federally Registered Investment Advisor. WealthKeel LLC, 615 Channelside Drive, Suite 207, Tampa, FL 33602 -- 267.590.9533.
Olson Consulting LLC, Offering Advisory Services and Financial Planning, is a State-Registered Investment Advisor.
A podcast designed specifically for physicians, offering a breakdown of complex financial topics to help you develop your financial IQ, further your financial journey, and improve your well-being. Whether you're a medical student, resident, fellow, or attending physician, you're sure to learn something new that will benefit your journey.
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