To HSA or not to HSA?

[BarkyardBQ]

My wife has a HDHP and an HSA, we have a few questions about whether it will be worth it to continue using this.

Currently the money is in a cash account, not invested, we recently found the fund options, which are not great... GRMAX is the best.

If I currently have a HMO/PPO and can add her during open enrollment, and the copay could be $5-25, and per paycheck contribution either 131 or 215 is it worth it keep her on the HDHP?

What if in the future, she no longer has the HDHP and has unused contributions and investment, can it be rolled over, used anyway?

In the next 12 months we plan on getting pregnant. HMO/PPO should be cheaper for pregnancy and child healthcare?

Can she add me to her plan?

I do not care so much about deferring more to pretax accounts, already deferring 50k/y. I care more about quality of coverage and out of pocket expenses. We are currently working on the math for total cost of adding either of us to either plan.


Thanks for you help!

[NathanP]

The real question here is whether the HDHP is a better financial option than the traditional HMO/PPO plan. The ability to fund and use an HSA is really a secondary concern. To answer the easy question, any unused HSA money can be kept with the existing custodian or moved to another HSA custodian to be spent on future medical expenses.

In choosing whether to go high deductible you have to create a simple spreadsheet and run some scenarios. Consider what would happen if you have a bad year where your wife has a costly surgery, child birth, high dollar prescriptions, and multiple doctor visits. If the deductible isn't that high, and you can save enough on the premiums then the HDHP is the best choice. If your risk tolerance is low and your employer heavily subsidizes your insurance premiums then the HMO/PPO is likely a better fit.

[Bob W]

The real question here is whether the HDHP is a better financial option than the traditional HMO/PPO plan. The ability to fund and use an HSA is really a secondary concern. To answer the easy question, any unused HSA money can be kept with the existing custodian or moved to another HSA custodian to be spent on future medical expenses.

In choosing whether to go high deductible you have to create a simple spreadsheet and run some scenarios. Consider what would happen if you have a bad year where your wife has a costly surgery, child birth, high dollar prescriptions, and multiple doctor visits. If the deductible isn't that high, and you can save enough on the premiums then the HDHP is the best choice. If your risk tolerance is low and your employer heavily subsidizes your insurance premiums then the HMO/PPO is likely a better fit.

+1  Also,  HSAs are great if self directed and invested wisely.  You can carry it to age 59.5 and then withdraw it as needed tax friendly.     You can also use the money (unless they changed the rules since I last used it) to pay for current medical expenses.   

[BarkyardBQ]

Is that true even if she leaves her current employer and gets a new benefit plan with a low deductible health plan? IE... she could continue to use those funds in the future to pay for any medical expenses?

[fa]

Is that true even if she leaves her current employer and gets a new benefit plan with a low deductible health plan? IE... she could continue to use those funds in the future to pay for any medical expenses?

Yes.  The HSA is an individual account and can be used to pay for any medical expenses now or in the future.  Also, you can keep medical bills now and choose not to pay them out of the HSA now.  You can use those medical bills in the future to take money tax free out of your HSA.  That allows you tax free "income" after you are retired.