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Contributing to an HSA (self.personalfinance)

submitted 1 year ago* (last edited 1 year ago) by root to c/[email protected]

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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

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[–] [email protected] 2 points 1 year ago* (last edited 1 year ago) (1 children)

Math it out. You'll need to look at the difference in premiums you pay, out of pocket costs, and the HSA contribution and decide which gives you better total value.

Line up the costs of the PPA in one column, and the costs of the HSA in the other less the employer contribution. Also consider that HSA contributions from you are pretax, so it's reducing your tax burden (figure out your income tax bracket, then add in SS and Medicare, which is ~7.5%, then multiply by whatever you save for HSA spending). Sum all of that up and you'll have your answer as to which is a better deal for you.

[–] tburkhol 1 points 1 year ago

This is the right answer, but it seems like lemmy doesn't care.

Both options are going to have fixed values - premiums, employer HSA contribution, tax benefits - and cost-of-care dependent values, which will change when you hit the relevant deductible. Plot the total cost of each option against the nominal cost of care, and pick the one that's cheaper, now that OP's expected cost of care has changed. Neglect the tax benefit if that seems like too-advanced math.