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wilsonhammer t1_iuiq9ye wrote

the biggest marginal benefit of the HSA over extra dollars into your 401k is avoiding FICA taxes on it (7.5%). if you fully max out your HSA for the year, that's $288.75.

Dump the HSA and put the difference into your 401k and be glad you have a kickass PPO option with excellent meds/therapy coverage. (I'm in a similar boat myself where my company funds $0 into my HSA and the difference in premiums is only $200/year)

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alexm2816 t1_iuisa19 wrote

The psychology around getting a $500 bill every time a kid needs an x-ray vs a modest co-pay (even when at the end of the year it boils down to a similar 'out of pocket') is real. I definitely was more gung ho on seeing the PT, getting a dermatologist consult, getting in to urgent care, and otherwise being pro-active on health things because while the cost of the 2 plans OOPM might be similar with a PPO plan I had no incentive to not go while my HDHP took money out of my investments / pocket while I held money in an HSA for 'later'.

Maybe others don't struggle with that hurdle but I would much prefer a quality PPO even if I don't 'need' it.

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AgentMonkey t1_iujo8y6 wrote

One great way to get over that hurdle is to actually compare your costs on each plan. I've done it every year for the past 7 years, and there has not been a single time where the cheapest, highest deductible plans wasn't the best financial option: https://imgur.com/a/GL0z8h1

I should note that, while I do invest some of my HSA money, I'm not as enamored with the long-term investing as many are. I use the HSA for all current medical expenses, and only what I don't need gets invested for the long term.

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wilsonhammer t1_iujwffk wrote

OP has done that. They've already found that the PPO is ~$5k cheaper per year and now they're just trying to square that result with the fact that (for everyone else) the hdhp+HSA is the cheaper option by far AND lets you invest.

But their situation is the exception to the rule because they actually have good coverage at a cheap cost.

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AgentMonkey t1_iuk2c8c wrote

Yeah, I was just replying specifically to the comment I replied to and their struggle with the mental hurdle of paying more directly to the provider. I was just sharing what has helped me psychologically get over that hurdle and see the larger picture and how it is actually saving money.

For the OP, yes, the PPO absolutely makes more sense, mainly because the employer is fully covering the premiums. That's also why I don't really like the "standard" advice for HDHP/HSAs, since the specifics of the plans and expenses are really what determines if its worthwhile or not. I don't really think there's a good one-size-fits-all (or one-size-fits-most) rule for HSAs.

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wilsonhammer t1_iuix2e3 wrote

It creates a perverse incentive to actively not seek care. It's one of the major reasons I'm switching back to a PPO instead of my HSA.

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