[Cathy]

In order to have a HSA account, I need to participate in a high deductible plan. That is what is offered by my employer. I have a $1600 deductible and a $4000 out of pocket max.

If I know I’m going to need some medical services, should I pick a low deductible plan for that year and forgo the HSA account?

Or would it be better to keep the high deductible plan so I can keep the HSA account and eat the highly indigestible big medical bill?

[Cody]

It sounds like you don’t have HSA-eligible coverage.
Having a “high deductible” doesn’t necessary make your coverage a high deductible health plan (HDHP), eligible for HSA contributions.

In 2025, the self-only deductible must exceed $1,650 and family deductible exceed $3,300.

And the out-of-pocket maximums must not exceed $8,300 for self-only coverage or $16,600 for family coverage.

Consider the tax savings when maxing out an HSA vs. the difference of out-of-pocket costs between health plans.

Also consider the long-term, tax-free growth potential of HSA investments, although it’s not as easily quantifiable.

[Sean]

It’s not really a feelings problem, it’s just a math problem. Do the math and see which comes out ahead.

The premium is usually significantly cheaper for the hdhp plus you get the tax savings from maxing out the hsa compare that to the higher out of pocket payments when you use the healthcare.

[Erica]

This is a math problem, so our opinions don’t matter. You’ll need to compare premiums, deductibles and OOP Max, including out-of-network.

Depending on the procedure, the higher deductible might still be cheaper total for the year.

[Michael]

Assuming you have experience with both, just do the math and see what will be more cost effective.

I did this when I switched from my company’s PPO to the CDHP and found that in almost all instances the CDHP came out ahead

[Megan]

To contribute to an HSA you need a QUALIFIED HDHP not simply “a health plan, with a high deductible”

[Nicole]

Be sure to check that the plan clearly says HSA eligible.

[Amy]

You do need to confirm that the plan you are looking at is HSA eligible.

If it is, then you need to decide if you have the means to pay the deductible and max out of pocket without dipping into the HSA.

The most effective use of an HSA is to keep the money invested to take advantage of tax-free withdrawals in the future.

You still get a current tax benefit because of the deduction for contributions.

[Author]

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