Contributing to an HSA
Contributing to an HSA
I have been contributing to a HSA the last couple years, and it's been fine. My work contributes $1800 over the year and it hasn't really been a problem at all.
Now I have a kid and a spouse on my insurance, and they tend to go fairly often it seems. The copay and deductible on the HDHP is a bit crazy and I'm thinking of swapping to a PPO. Is that a good idea, or is turning down the free $1800 from my work a no no?
Here is a link to the plans
I feel like every time I see a version of this question online, I mostly see people talking about how HDHPs and HSAs are always the right choice. So, I want to provide the perspective of somebody that opted for a PPO rather than an HDHP.
My workplace offers both a PPO option and a HDHP with a company contribution. I opted for the PPO because the HDHP's out of pocket max was so much higher than the PPO that it would be very difficult for us if something were to happen. My wife has a chronic illness that is manageable most of the time, but there is always that risk that we suddenly need to have a whole bunch of very expensive specialist visits and procedures done. Yes, if it is a good year, I probably came out behind compared to having a HDHP + HSA investments. However, I value the risk mitigation that having the PPO plan provides for the chance that it isn't a good year. The situation can be very different for different people though.
Thank you for your response, and I hope you and your family stay healthy. I have similar concerns for things that might pop up, but luckily everyone is generally pretty healthy. Last year we had to take a quick trip to urgent care and my copay was $450. It was a surprising amount, because previously I had never paid more than $75 for a visit. I was able to use my HSA for it, but man..if something more serious happened I could see that getting really expensive fairly quickly.
Been there. It came down to your total deductible for your family HDHP plan. for me it was out of pocket max 6k for the family HDHP, and HSA was $6700. So, immediately, i’m up $700 every year on an account I can keep (unlike medical FSA). Hit that $6000, no more out of pocket for in network care till next calendar year.
Look PPO is nice because it’s smaller deductibles up front, where-as HDHP is visit costs till you hit your out of pocket max. you get FSA up front, but it’s use it or lose it funds. So often people get FSA and find themselves end of year buying stuff from the FSA store to max it out. HSA is yours, earns interest (usually) and can be used post retirement. not to mention it’s only spent when you need it and carries over yearly, so don’t spend this year at all, you now have more for next year.
Family of 5, HDHP was a life saver once we figured out HSA.
You’ll probably need to provide more details about the premiums, deductibles, and out-of-pocket maximums of PPO vs HDHP, projected healthcare costs (at least your current year costs so far), and how much you are able to stomach for the cost now vs later
PPO might be better if you can stomach the premiums and hit your deductible early enough. HDHP might be better if you can stomach the higher deductible and reimburse yourself years down the line after your HSA has had some time to be invested and grow from its investments
It’s hard to say without concrete numbers and only going based off thoughts and feelings
Edited the OP with a overview of the plans. Thank you for the reply!
Your image doesn't include the cost of the premiums. My work offers similar types of plans except the HDHP is 'free' while the PPO has premiums totalling $5-6k per year. For us, it makes zero sense to use the PPO since it's guaranteed to cost at least $5-6k whether we see a doctor or not. With the HDHP, the theoretical minimum cost for the year is $0 if we never go to the doctor but realistically we usually get close or hit our family deductible but it's still cheaper than the PPO.
I don't know about PPOs, but your HSA contributions should also be pretax.
If you do switch, note that the usual is that it stays as an HSA card but since it’s not being actively contributed to, you get charged a small amount (usually $1/mo) for “account maintenance”. You can continue to use it for all medical purposes, including paying for all copays and deductibles and medicines etc. as usual.
Depends on where you have your HSA. No one is forcing you to leave your HSA $$ at your employer's HSA provider, and in fact you can maintain multiple HSA accounts if you like. The main catch is that you'll want to keep the tax advantages for contributions into an HSA so initially you should still use the employer's HSA provider for that (to get that payroll deduction + employer match if they offer it).
e.g. my employer's HSA provider's investment options aren't great so I only leave a small amount there & transfer the rest of my collected HSA $ into a Fidelity HSA account. Fidelity does not charge account maintenance fees AFAIK.
EDIT: For OP if they no longer want to use their employer's HSA, & they've stopped contributing to it, they may as well transfer the entire balance over to Fidelity or some other HSA provider with $0 fees & invest there. It'll be similar to maintaining an IRA account.
Funny you should say that, since Fidelity is the one charging me fees after I left my employer. Thanks for sharing that we can move money between HSAs. I might look into that at some point in the future. In general though, I find it despicable that healthcare money is also pushed as an “investment vehicle”. If and when the market tanks, HSAs tank with them, right? What a fucked up thing to do, USA.
Good point, I hadn't considered rolling over. I'd like to get away from Kaiser, but my HDHP option with Anthem is 20% after the deductible. So I guess it will with be PPO or stick with Kaiser -_-