- Net plan cost
- The yearly total this calculator compares for each plan: annual premium plus what you pay out of pocket for your expected medical costs, minus any employer HSA contribution and, for the HDHP, the tax saved on your HSA contribution. The plan with the lower net cost is shown as the lower-cost plan.
- High-deductible health plan (HDHP)
- A health plan with a higher deductible that meets IRS requirements and makes you eligible to contribute to an HSA. It usually has lower premiums than a traditional plan, so it tends to cost less in years with low medical use and more in years when you spend heavily before reaching the deductible.
- Premium
- What you pay for the insurance itself, whether or not you use any care — often taken from each paycheck. Enter the annual amount you pay, not the employer’s share. Premiums are a fixed cost in this comparison; the difference in premiums is usually the starting advantage of the HDHP.
- Deductible
- The amount you pay for covered care each year before the plan starts paying. This calculator assumes the plan pays 100% after the deductible, so your out-of-pocket cost is the smaller of your expected medical costs and the deductible. Real plans usually add coinsurance and copays after that point.
- Expected medical costs
- Your estimate of the covered medical spending you will have this year, such as visits, tests and prescriptions, at the plan’s negotiated prices. It is the input that most often flips the result: low expected costs favor the HDHP, while costs well above its deductible can favor the traditional plan.
- Employer HSA contribution
- Money your employer puts into your HSA when you choose the HDHP. It directly offsets the HDHP’s cost in this comparison and is not taxed as income to you. It counts toward the annual HSA contribution limit together with your own contributions.
- Marginal tax rate
- The rate that applies to your last, or next, dollar of income. Enter your combined federal and state marginal rate. Each dollar you contribute to an HSA avoids tax at roughly this rate, so the HSA tax saving here is your contribution multiplied by it — $3,000 at 24% saves $720.
- HSA tax savings
- The income tax you avoid by contributing pre-tax to an HSA, estimated as your contribution times your marginal rate. Contributions made through payroll also skip 7.65% FICA tax, as this calculator’s disclaimer notes, but that extra saving is not counted here, so the result is conservative for payroll contributions.
- Out-of-pocket maximum
- The most you pay for covered care in a plan year through deductibles, coinsurance and copays; after that the plan pays 100%. This calculator does not model it — it assumes full coverage right after the deductible — so for high expected costs, check each plan’s out-of-pocket maximum before relying on the result.