Need a bigger tax break? Have a healthy family? You might want to consider using a high deductible health insurance plan rather than a more standard HMO or PPO plan. You benefit from the lower premiums, and because your family is healthy, you’re unlikely to actually need to spend much money on health care.
But if something horrible happens like a diagnosis of cancer or a horrible car accident, you still have catastrophic coverage and a cap on your total out of pocket expenditure. But the best part of an HSA is that it functions as a stealth IRA.
For the first time this year during open enrollment I have the option to enroll in a plan that qualifies me for an HSA. My wife does not have such an option. We have 2 kids and they are currently on my health insurance (cheaper) but if we switch them to my wife this year and I choose the HSA plan, our total out of paycheck healthcare costs would go up by about $2000. Given that if I contribute $3450 to the HSA it is tax deductible and has 20+ years growth potential, is this trade off worth it in your opinion? I think it is, even assuming the $2K would have been otherwise invested in a taxable account. Any thoughts?
If you put at least one kid on your plan you can put twice as much into the HSA as a family contribution.
At any rate, choose the plan that is right for your family first, then if that plan is HDHP, use an HSA. If it isn’t, forget about the HSA.
https://www.whitecoatinvestor.com/should-i-get-an-hdhp-just-to-use-an-hsa/