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HSA vs. PPO? Sell me on HSA

Posted on 9/30/14 at 7:42 pm
Posted by LSU alum wannabe
Katy, TX
Member since Jan 2004
27026 posts
Posted on 9/30/14 at 7:42 pm
Looked into it 10 years ago. Did not make sense. Do they make sense yet?

Wife's work had great plan. But the dream is over and real premiums returned. Family premiums $700+ a month. So all at her job lost their shite and are looking into HSA's. 40 with a wife and soon to be 5 year old?

Have HSA's improved?
Posted by Zilla
Member since Jul 2005
10599 posts
Posted on 9/30/14 at 9:51 pm to
an HSA is a savings account that you can use if you are on a HDHP ....they are great...i have an old 5 figure account from a previous job that I rolled over to hsabank.com and I invest it in stocks (no tax on growth for) ...I'll have my own personal little medicare once it goes bankrupt!

So yea, HSAs are great b/c they are basically another retirement vehicle...so get one, but don't use it, just fund it ...think of it like extending your roth ira contribution limits :)
This post was edited on 9/30/14 at 9:52 pm
Posted by foshizzle
Washington DC metro
Member since Mar 2008
40599 posts
Posted on 9/30/14 at 10:10 pm to
HSA's can be a great vehicle if you get in early. While you're young your medical bills are probably very low and you can invest the money just like you would an IRA, without spending much.
Posted by LSUFanHouston
NOLA
Member since Jul 2009
37171 posts
Posted on 9/30/14 at 10:34 pm to
Sometimes, they make a lot of sense. HSA isn't an insurance plan, an HSA is a special savings account used in conjunction with a High Deductible Health Plan (HDHP). So it depends on how good the HDHP is, and how sick you are.

I was part of one in the past that had a $1500 deductible, and my employer put $750 each year into an HSA for us. I put in another $750. So basically, we had to pay for the first $1,500 in medical expenses, which we used the HSA for. After the deductible, the insurance company paid 100 percent of the medical expenses. It was a great plan.

If you are young and single and healthy, HDHPs can be great, especially if your employer will match some of your HSA contribution.

I have two young kids, and we are in a PPO plan. We had an option for a HDHP, but the family deductible was like $6,000. And, the premium wasn't much cheaper. Kids always get sick, break their arm riding a bike, etc.

Talk to your benefits company and see if they have a calculator available to play out different scenerios and see how it goes. If the premium differece is huge, use that premium difference to fund the HSA, and you might come out ahead.
Posted by Volvagia
Fort Worth
Member since Mar 2006
51919 posts
Posted on 10/1/14 at 1:16 am to
If you are healthy they are amazing because they keep more money in your pocket at a multiple tax advantage.


However, this advantage goes if you need regular maintaince meds.
Posted by tirebiter
7K R&G chile land aka SF
Member since Oct 2006
9295 posts
Posted on 10/1/14 at 1:16 pm to
I like the triple tax advantages, the $750 employer contribution and 1040 line item deduction, line 25. Speaking generically, but likely applicable to most, it is like a Roth medical savings plan + the contributions are deductible with the exception of I think 3 states. If the plan does not have good investment features it likely allows one to roll/transfer contributions to another administrator that has better options. You would need to evaluate it with the other insurance options offered to ensure it is the best thing for your family. Like others, we cash pay and build the account for future medical/dental/prescription costs.
Posted by AnonymousTiger
Franklin, TN
Member since Jan 2012
4863 posts
Posted on 10/1/14 at 3:54 pm to
Wait. It is not really an "HSA vs. PPO," right?

The way I understand it is that an HSA is an option that can go along with high deductible plans (such as some PPOs).
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