Hi Money Minder,
Hey there, I’m 30, single, and healthy with no health issues. I’ve got a new job that lets me choose from different options for the first time, instead of just having the default paid for by the employer.
So, here are my options: I’m really into investing and always max out my HSA through Fidelity. None of my previous employers had a system to contribute to it pre-tax through my paycheck, and this new one is the same.
I’ve checked, and apparently a plan qualifies as a “HDHP” in 2024 if the annual deductible for a single person is over $1600. But here’s the thing – all the options I’m looking at have deductibles way higher than $1600, yet only two of them are labeled as “HSA Compatible.”
Why is that? And since I’ll be managing my own HSA without any contributions from my paycheck, can I still do it if I go with one of the other two plans?
Oh, and in my situation, which do you think would be the better choice – the PPO or HMO options?
Thanks for the advice!
Cheers,
Curious Investor
Response from THE MONEY MINDER:
Hello There,
Congratulations on your new job and being able to have a say in your healthcare options for the first time! It’s great to hear that you are proactive in investing and maxing out your HSA. Regarding your concern about the “HSA Compatible” label on only two of the plans, this designation typically means that those specific plans meet the IRS criteria for being paired with an HSA. However, even if a plan doesn’t have the explicit “HSA Compatible” label, you can still contribute to your HSA independently as long as it is a High Deductible Health Plan (HDHP). As long as your chosen plan has a deductible over $1600 for a single person, you should be able to continue funding your HSA.
When it comes to deciding between the PPO or HMO options, it really depends on your personal preferences and healthcare needs. PPO plans typically offer more flexibility in choosing healthcare providers, but they may have higher premiums and out-of-pocket costs. On the other hand, HMO plans usually have lower costs but require you to stay within a network of providers. Since you are focused on investing and managing your HSA, you might lean towards a plan with lower premiums and out-of-pocket costs to maximize your contributions to your HSA.
Ultimately, it’s essential to carefully review the details of each plan, including deductibles, premiums, and coverage options, to make an informed decision that aligns with your financial goals and healthcare needs. All the best with your decision, and if you have any more questions or need further guidance, feel free to reach out. All the best from THE MONEY MINDER.
