…65, and it’s only tax free if you use it for health expenses (which, admittedly, shouldn’t be an issue at that age). If you withdraw for other reasons (after age 65), you pay the tax.

I agree that it’s a fantastic investment vehicle and that’s why I max mine…especially because my HDHP will always cost me less than my PPO, even in “high cost” years. But in OP’s case it’s just not that clear cut, and they mentioned they still have some runway on their regular retirement accounts.

Agree, and I acknowledged that. However, a lot of healthcare spending is/can be tax deductible. Premiums for sure, and other expenses can be paid out of an FSA if you’re on a PPO plan. Sure, there are tons of benefits to an HSA (no use it or lose it, investment options, etc.) but the short term tax benefits of an HSA aren’t all that different from an FSA if you’re just comparing annual medical costs and not using it as a vehicle for longer term savings.

Don’t get me wrong - I LOVE my HSA and max it every year. Having a big fat account built up during my younger years really cushioned the years I was pregnant and/or my kids had ER visits.

I will say that it’s very difficult to account for a PPO’s co-pay. For example, I had a baby last year and easily hit my deductible. That means my on-going PT appointments only cost me $7 each instead of $70! On a PPO they would have been $40 specialist visits. In a year that I didn’t have a baby and hit my deductible, those same appointment would have cost the full $70 and perhaps the PPO would have been more advantageous depending on the number of visits.

You’re not missing anything. This situation is unique in that this particular HDHP offered is not substantially better than the PPO offered.

I made a graph. Your break-even (not accounting for tax benefits of using an HSA) is if you incur about $900 in non-copay healthcare costs.

PPO: $1608 premiums + $400 deductible + 20%*($900-400) coinsurance = $2108 CDHP: $1224 premiums + $900 toward deductible = $2124

At less than $900 in medical costs, the CDHP is between $0 and $384 cheaper ($384 is the difference in premiums assuming you have no other medical bills). Above $900 in costs, the PPO is between $0 and $1616 cheaper ($1616 is the difference in out of pocket max minus the difference in premiums).

That potential $384 in premium savings with the HDHP isn’t super compelling, especially given that you have a guaranteed annual medical expense (the eye specialist) that gets you nearly halfway to the break-even.

By the way, I made a similar graph/analysis comparing my employer’s PPO and HDHP offerings for an individual. There is NO break-even point - the HDHP is at worst $321 cheaper than the PPO, and at best $1400 cheaper. In years that I have no medical expenses, which is fairly typical for me, I pocket the entire premium difference of $571 plus my $500 employer contribution to my HSA.

Definitely not. You are eligible for an HSA (emphasis on ACCOUNT) when you have a HDHP, but your employer is under no obligation to contribute to that account on your behalf (although many do).

My experience is two different employers that put $500 annually in your individual account ($1000 family). The replies in this thread show a range of employer contributions, starting at nothing.