How to Lower Your Healthcare Costs with HDHPs, EPOs, and Those Other Acronyms You Pretend to Understand

Alright, let’s talk about saving some cash on healthcare.

I know, I know, you hear healthcare, and your wallet immediately starts screaming, right?

Like, ‘No! Please, no more bills, no more premiums, I can’t take it!’ But don’t worry, I got you.

We’re going to dive into some stuff that’s going to help keep your bank account intact while still making sure you can see a doctor when, you know, life happens.

And I promise we’ll have some fun along the way.

The HDHP: Lower Premiums, Higher Deductibles, and Big Tax Savings (But Watch Out)

Let’s start with the HDHP—the High Deductible Health Plan.

Now, I know what you’re thinking: ‘High deductible? That sounds like I’m paying out of pocket for every little sniffle and paper cut!’

And yeah, you kind of are, but here’s the thing—you’re also saving big on those monthly premiums. And guess what? You can stash some of that saved cash for when you need it.

Enter the HSA—the hero of this story.

With an HDHP, your premiums are low, but if something goes wrong, you’ll have to meet a high deductible before the insurance starts covering it.

So, it’s a bit like this: You’re walking around, playing it cool, saving that money every month, but deep down, you know if you twist an ankle, you better have that savings ready.

The secret weapon here?

The HSA (Health Savings Account). This isn’t just any savings account—it’s like a magic box where you put money in pre-tax. Yep, pre-tax dollars—so it’s like the IRS is paying part of your healthcare bill. You use it for doctor visits, prescriptions, your kid’s braces, whatever you need.

And guess what?

That money rolls over year after year, so you don’t have to stress about spending it all by December 31st like some sad game show contestant. You don’t lose it. You use it when you need it.

Thinking About Moving to an EPO? Here’s Why You Should (and Shouldn’t)

Now, maybe you’re thinking, ‘Alright, Rodney, I get the HDHP thing, but I’m not about that high deductible life.

I don’t want to be playing some healthcare lottery where I’ve got a “pay your deductible” bingo card.’ Okay, fine—maybe you’re more of an EPO person. You like control but you’re not all about jumping through hoops.

The EPO is like your cool cousin—Exclusive Provider Organization—it gives you some freedom but keeps things a little more locked down.

You don’t need referrals from your primary care doc to see a specialist, which is great because, let’s be honest, who wants to call your doctor just to ask if it’s cool to go see someone else? You’re a grown adult, right?

But here’s the deal: EPO plans keep you in-network. You stay in their approved doctor network, or guess what? You’re paying for that freedom. So, as long as you’re cool with staying in the club, EPO’s got your back. Lower premiums, but you still get access to specialists without begging anyone for permission. Just stay in-network, and it’s all good.

HRAs, HSAs, and FSAs: Alphabet Soup That Saves You Cash

Okay, let’s break down these alphabet-soup accounts. You’ve got HRAs, HSAs, and FSAs—they sound like something from a corporate policy manual that no one ever reads, but these bad boys? They can save you a lot of money if you use them right.

HSA (Health Savings Account)

We’ve already talked about HSAs. It’s your savings account for anything health-related, and it’s like the gift that keeps on giving. Money goes in pre-tax, it rolls over year to year, and you can spend it on stuff like doctor visits, medications, or even your kid’s braces.

You’re paying less in taxes, and when the time comes to pay that deductible, you’ve got a stash of cash ready to go. Think of it like your healthcare rainy day fund.

FSA (Flexible Spending Account)

Next up: FSA. Now, the FSA is like the HSA’s forgetful cousin, but with potential. It’s great—tax-free money for health expenses—but you’ve gotta use it by the end of the year or else… poof it’s gone. It’s like Cinderella after midnight—one second you’re ready to pay for a dental visit, and the next, you’ve got nothing but an empty wallet and a lot of regret.

The trick? Plan ahead. You know you’re gonna have those costs, so use it. It’s good for everyday expenses like glasses, prescriptions, and even that annoying co-pay at the doctor’s office.

HRA (Health Reimbursement Arrangement)

And finally, we’ve got the HRA. Now, this one’s interesting. It’s not your money. It’s the company’s money—but hey, if your employer’s offering to foot part of your healthcare bill, who are you to say no? Your employer reimburses you for medical expenses up to a certain limit, and you don’t get taxed on it.

You just submit your expenses, and your company hands you cash back. It’s like your boss playing a friendly game of ‘I got this one, you get the next.’

So, if your job offers an HRA? You’re in a pretty sweet spot.

How to Use These to Lower Your Costs: It’s All About Strategy

Now that we’ve decoded these acronyms like we’re solving a healthcare mystery, how do you use them to lower your costs?

Here’s the strategy:

HDHP + HSA: Power couple. You’re saving on premiums, putting away pre-tax dollars, and you’ve got that HSA ready for when the deductible shows up. You’re playing the long game. Plus, you’re building that HSA balance like a healthcare retirement account—not bad.

EPO + HRA: Solid team-up. If your employer’s handing out HRA money like free samples at Costco, take it! You stay in-network, save on premiums, and let your boss cover part of the expenses.

FSA for the planners out there: If you know you will have regular health expenses (and you may), the FSA lets you pay for them with tax-free money. Just remember to use it before it turns into a pumpkin at the end of the year.

Final Thoughts: Save Big, Stay Covered, and Don’t Let the Acronyms Win

Look, I know health insurance is about as fun as watching paint dry, but here’s the thing—you don’t have to let it bankrupt you, and you don’t have to feel like you’re deciphering a secret code just to pick the right plan. HDHP, EPO, HSA, FSA, HRA—it’s all about using the right tools at the right time.

Save those pre-tax dollars, stay in-network when you need to, and let your boss chip in if they’re offering. You’re saving cash and staying covered—and isn’t that the dream?”

So next time someone throws an acronym your way, just smile and say, ‘I got this.’

Because you do.

And if you need a hand figuring it out?

Well, you know where to find me. Let’s keep those costs down and the coverage up, my friends. It’s what the pros do.

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Rodney Steele is the CEO of Dinsmore Steele, the leading PEO brokerage that helps businesses simplify their HR, payroll, and employee benefits. With years of experience in the PEO space, Rodney is passionate about assisting companies to navigate complex decisions, from PEO renewals to benefit plan negotiations.

Known for his humor, wit, and straightforward advice, Rodney provides valuable insights that make HR outsourcing easy to understand and execute. When he's not closing deals or advising clients, you can find him playing pickleball or enjoying time with his family on Long Island.