‘From what I understand, I am allowed to get this second health insurance and still contribute to an HSA’: Should I get a second HDHP for an HSA if I’m already covered by my parents’ plan?

Hi Money Minder,

I’m debating whether to switch to my employer’s HDHP with HSA for $130 a month even though I’m still under 26 and covered by my parents’ plan. Can I still contribute to the HSA if I have two health insurances? And would it be worth it if I max out my contributions?

Thanks for your help!

Cheers,
Savvy Saver

Response from THE MONEY MINDER:

Hello There,

Congratulations on having access to not one, but two HDHP options! Making a decision between your parent’s plan and your employer’s offering can be a daunting task, especially when considering the financial implications. In your case, where you can still contribute to an HSA while being covered by both plans, it’s essential to weigh the costs and benefits carefully.

Firstly, make sure to compare the coverage and costs of both plans. Look at the premiums, deductibles, co-pays, and out-of-pocket maximums to determine which plan offers better value for you. If your employer’s HDHP with HSA costs $130 per month, calculate how much you would save or spend compared to staying on your parent’s plan.

Since you mentioned making the maximum contribution to the HSA, consider the tax advantages that come with it. Contributions to an HSA are tax-deductible, grow tax-free, and can be withdrawn tax-free for qualified medical expenses. If you anticipate high medical costs in the future, having an HSA can provide a valuable financial cushion.

In the end, the decision will depend on your individual circumstances and healthcare needs. Consider factors such as network coverage, anticipated medical expenses, and your ability to make HSA contributions. It may also be worth consulting with a financial advisor or HR representative to get personalized advice. Taking a realistic and practical approach by crunching the numbers and comparing the benefits will help you make an informed decision about whether enrolling in your employer’s HDHP with HSA is worth it. Good luck in making the choice that best suits your situation!

Farewell from THE MONEY MINDER.