Both my work and my husband's work charge add'l $100/month surcharges if the spouses have health insurance options through their employer. It's due to the Obamacare tax. We had to drop our lovely PPO with a $200 deductible & low copays and move to separate HSA insurances through our respective employers with high deductibles because of this. I hate it.
If you're maxing HSA contributions your employer likely just did you a favor. If you're not do yourself a favor and max them. Even if we max out our high deductible plan we still come out ahead over the ppo. Do the math
What benefit is there to having a bunch of money in our HSA when it can only be used for medical? We can't maximize it right now anyway because we're still getting out of debt.
HSA is tax and FICA excluded if you use payroll deduct. thats a minimum of around 30% return on your money give or take. be interested to know what your rates were on your loans that this wouldnt benefit you to fund over a loan.
brings all this full circle to what benefit were you getting from being on the PPO if youre not using your doctor alot. it would be forward thinking and future planning. it can also be used like a Trad IRA once you hit 59.5 or 65 ...
funding of accounts should go
WHAT
0. Establish an emergency fund to your satisfaction
1. Contribute to 401k up to any company match
2. Pay off any debts with interest rates ~5% or more above the 10-year Treasury note yield. this would be around 6.5% right now.
3. Max HSA
4. Max Traditional IRA or Roth (or backdoor Roth) based on income level
5. Max 401k (if 401k fees are lower than available in an IRA, or if you need the 401k deduction to be eligible for a tIRA, swap #4 and #5)
6. Fund mega backdoor Roth if applicable
7. Pay off any debts with interest rates ~3% or more above the 10-year Treasury note yield.
8. Invest in a taxable account with any extra.
WHY
0. Give yourself at least enough buffer to avoid worries about bouncing checks
1. Company match rates are likely the highest percent return you can get on your money
2. When the guaranteed return is this high, take it.
3. HSA funds are totally tax free when used for medical expenses, making the HSA better than either traditional or Roth IRAs.
4. Rule of thumb: traditional if current marginal rate is 25% or higher; Roth if 10% or lower; flip a coin in between (or see
http://forum.mrmoneymustache.com/investor-alley/deciding-between-roth-and-traditional-ira-based-on-marginal-tax-rate/ if you want even more details on that topic). See also
https://www.bogleheads.org/forum/viewtopic.php?f=2&t=182081,
http://forum.mrmoneymustache.com/ask-a-mustachian/case-study-overwhelming-student-loan-debt-how-would-you-get-started/msg868845/#msg868845 and other posts in that thread about exceptions to the rule.
5. See #4 for choice of traditional or Roth for 401k
6. Applicability depends on the rules for the specific 401k
7. Again, take the risk-free return if high enough
8. Because earnings, even if taxed, are beneficial
stole this from MDM but its pretty solid advice
