Design question, how do you guys do floating health bars?

Say you want a floating, 2D health bar above your enemy in a 3d game. I see two potential ways of tackling this problem.

One is to make a widget, add it to the actor and render it in screen space. But this has many obvious flaws.

The other is to set up a plane (billboard?) and render a material or widget on it and have it always face the camera. Seems more professional but requires a lot more work.

Is the former approach ever a good idea? Can it depend on the perspective of your game and whether you have a rotatable or fixed camera? Or should you pretty much always do it the harder way.