HDHP with HSA vs. Traditional PPO Calculator
Compare payroll premiums, employer HSA contributions and tax savings against each plan's deductible, coinsurance and out-of-pocket maximum.
Plan A: HDHP + HSA (High Deductible)
Plan B: Traditional PPO (Low Deductible)
Traditional PPO members cannot use an HSA and must use a Flexible Spending Account (FSA). Unused FSA funds are forfeited at year end unless the plan offers a grace period or a carryover, capped at $680 for 2026.
HDHP + HSA Saves $2,378/Year at Current Spending
| Healthcare Spending Scenario | Plan A (HDHP + HSA) Net Cost | Plan B (PPO) Net Cost | Difference |
|---|---|---|---|
|
🟢 Low / Preventive Year ($500 bills) Annual checkups & minor RX |
$32 | $3,670 | HDHP lower by $3,638 |
|
🟡 Moderate Medical Year ($3,500 bills) Specialist visits, physical therapy, MRIs |
$1,592 | $3,970 | HDHP lower by $2,378 |
|
🔴 High-Cost Year ($25,000 bills) Surgery, childbirth, hospital stay hitting OOPM |
$4,032 | $6,120 | HDHP lower by $2,088 |
HSA money carries over from year to year. If the unspent $2,340 a year (your $3,650 plus the employer contribution, minus this year's out-of-pocket costs) stayed invested at an assumed 10% annual return, it would reach about $37,294 after 10 years. The return is an illustration, not a forecast.
Understanding the HDHP vs PPO Decision
What this calculator does
This calculator compares the total yearly cost of two employer health plans: a high-deductible health plan (HDHP) paired with a Health Savings Account, and a lower-deductible PPO, optionally with a health Flexible Spending Account. It is for employees choosing a plan at open enrollment. You enter each plan's monthly payroll premium, deductible, coinsurance and out-of-pocket maximum, the employer's HSA contribution, your own HSA or FSA contribution, a combined tax rate and your expected medical bills. It shows the net cost of each plan at your expected spending and at three reference levels, $500, $3,500 and $25,000 of bills.
How the math works
Net cost for each plan is twelve months of premium, plus what you pay for care, minus the employer's HSA contribution, minus the tax saved on your own HSA or FSA contribution. What you pay for care is the bills up to the deductible, plus your coinsurance share of anything above it, capped at the out-of-pocket maximum. The tax saving is the contribution times the rate you select, which includes the 7.65% payroll tax because both HSA and FSA contributions through an employer's cafeteria plan avoid it.
The model is deliberately simple. It treats all spending as subject to the deductible, so it does not model copays or the preventive care most plans cover at no cost. It does not charge the PPO for unused FSA money that is forfeited, and it treats the HSA contribution as savings rather than a cost, because the money stays in the account. Your own HSA contribution and the employer's must together stay within the 2026 limit; IRS Publication 969 requires the employer's contribution, including amounts through a cafeteria plan, to reduce what you can add. The defaults and presets are set to the limit minus the employer contribution.
Worked example
This is the Solo Young Pro preset with medical bills of $3,500, which is also the calculator's moderate-usage row for that preset. The tax rate is 36.65%.
Under Plan A (HDHP + HSA):
- Premiums: $95 a month, $1,140 a year.
- Care: the $1,700 deductible plus 20% of the remaining $1,800, or $2,060, under the $4,000 out-of-pocket maximum.
- Employer HSA contribution: $500. Your contribution: $3,900, the $4,400 self-only limit minus the employer's $500, saving $1,429 of tax.
- Net cost: $1,140 + $2,060 − $500 − $1,429 = $1,271.
Under Plan B (PPO):
- Premiums: $220 a month, $2,640 a year.
- Care: the $500 deductible plus 10% of the remaining $3,000, or $800.
- FSA contribution of $1,000, saving $367 of tax.
- Net cost: $2,640 + $800 − $367 = $3,074.
The HDHP costs $1,803 less at this spending. Of that, $1,500 is the premium difference, $500 is the employer contribution and $1,063 is the larger tax saving on the HSA, offset by $1,260 more paid for care.
The 2026 rules that set the boundaries
| 2026 item | Self-only | Family | Source |
|---|---|---|---|
| HDHP minimum deductible | $1,700 | $3,400 | Rev. Proc. 2025-19 |
| HDHP maximum out-of-pocket (excluding premiums) | $8,500 | $17,000 | Rev. Proc. 2025-19 |
| HSA contribution limit, employer and employee combined | $4,400 | $8,750 | Rev. Proc. 2025-19; Pub 969 |
| Health FSA salary reduction limit | $3,400 per employee | Rev. Proc. 2025-32 | |
| Maximum FSA carryover, if the plan allows one | $680 | Rev. Proc. 2025-32 | |
The HDHP's deductible and out-of-pocket limits come from Revenue Procedure 2025-19, and the FSA amounts from Revenue Procedure 2025-32. A plan with a deductible below the minimum is not an HDHP, and its members cannot contribute to an HSA.
How much of the HDHP's edge comes from funding the HSA
At the calculator's defaults the HDHP costs less at every level of spending, but most of that margin depends on money going into the HSA. The table runs the default plans three ways: as entered, with the employer contribution but none of your own, and with no HSA contributions at all.
| Medical bills | Defaults ($750 employer + $3,650 yours) | Employer $750 only | No HSA contributions |
|---|---|---|---|
| $0 | HDHP lower by $3,638 | HDHP lower by $2,300 | HDHP lower by $1,550 |
| $2,000 | HDHP lower by $2,528 | HDHP lower by $1,190 | HDHP lower by $440 |
| $3,500 | HDHP lower by $2,378 | HDHP lower by $1,040 | HDHP lower by $290 |
| $5,000 | HDHP lower by $2,228 | HDHP lower by $890 | HDHP lower by $140 |
| $10,000 | HDHP lower by $1,728 | HDHP lower by $390 | PPO lower by $360 |
| $25,000 | HDHP lower by $2,088 | HDHP lower by $750 | About equal |
Without any HSA contributions, the HDHP's advantage is its $2,100 lower premium less the $550 tax the PPO member saves through the FSA, and the extra cost of care uses up most of the rest once bills pass a few thousand dollars. At $10,000 of bills the PPO costs $360 less. At $25,000 both plans reach their out-of-pocket maximums and the totals are within a dollar. The margin at high spending also depends heavily on the gap between the two out-of-pocket maximums, $1,000 in the defaults; a wider gap narrows the HDHP's advantage in an expensive year. Paying the deductible also needs cash on hand early in the year, which the annual totals do not show.
Frequently Asked Questions
Does an HDHP cover preventive care before the deductible is met?
Usually. IRS Publication 969 allows an HDHP to cover preventive care without a deductible and still qualify, and HealthCare.gov notes that most health plans must cover a set of preventive services, such as screening tests, at no cost when provided in network. Check the plan's summary of benefits for which services are included.
Can I keep my HSA funds if I leave my employer?
Yes. Publication 969 describes an HSA as portable: it stays with you if you change employers or leave the work force, and contributions remain in the account until you use them. A health FSA works differently; unused money is forfeited at the end of the plan year unless the plan offers a grace period or a carryover, which is capped at $680 for 2026.
What if I have a catastrophic medical event?
Both plans stop at their out-of-pocket maximums, so in a very expensive year the comparison comes down to premiums, employer HSA money, tax savings and the difference between the two maximums. With the default inputs and $25,000 of bills, the HDHP costs $2,088 less; with no HSA contributions the two plans cost about the same. Enter your plans' actual maximums to see your own case.
Can I use both an HSA and an FSA?
Not a general-purpose health FSA, which counts as other health coverage and ends HSA eligibility. Publication 969 allows HSA contributions alongside a limited-purpose health FSA or HRA, which can pay for items such as dental and vision care and for preventive care.
Does my employer's HSA contribution count toward the limit?
Yes. Publication 969 says the amount you or anyone else can contribute is reduced by contributions your employer makes, including through a cafeteria plan. With self-only coverage in 2026 and a $750 employer contribution, you can add $3,650 to reach the $4,400 limit.
Sources
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Disclaimer: Educational/scenario-analysis only; not tax, legal, or investment advice; consult a licensed CPA/advisor. Plan figures in the examples are illustrations; use your employer's plan documents.
Built and verified by The Breakeven Math — last reviewed September 18, 2026.