Tax season comes once a year, It’s a great reminder to check in on your health plan and explore savings opportunities. If you’re looking at a PPO, HDHP, or HSA, a little knowledge can go a long way in helping you save money and feel confident in your choice.
Here’s key information to consider.
Health Savings Accounts (HSAs)
An HSA offers triple tax advantages for those with a High-Deductible Health Plan (HDHP) who want to put away money on a pre-tax basis to pay for qualified medical expenses.
- Contributions are tax deductible.
- Funds grow tax-free, and roll over from year to year. That’s unlike funds in your employer-sponsored Flexible Spending Account (FSA).
- Withdrawals for qualified medical expenses are tax -free.
For 2026, your maximum HSA contribution limit is $4,400 if you have self-only HDHP coverage. It’s $8,750 if you have family health coverage. In addition, if you are over age 55, you are allowed a $1,000 catch-up benefit.
One big benefit. Your HSA belongs to you not your employer. So, if you leave your group health plan, you can take your HSA with you if you change jobs or retire.
You can use HSA funds for copayments, deductibles, prescription drugs, and other qualified expenses. For a longer list of qualified medical expenses, refer to IRS Publication 502.
Keep in mind, withdrawals for non-qualified expenses before age 65 are subject to tax and a penalty. Non-medical withdrawals after age 65 are subject only to tax, but with no penalty.
High-Deductible Health Plans (HDHPs)
In exchange for higher deductibles, HDHPs typically have lower premiums than other health plan types like Preferred Provider Organization (PPO) plans.
HDHPs are often a good fit for:
- Younger or healthier employees
- Employees with minimum medical needs
- Those interested in building long-term HSA savings
HDHPs have become increasingly popular in recent years. According to the 2025 KFF Employer Health Benefits Survey, a third of covered workers were enrolled in an HDHP last year (up from 27% in 2024).
Preferred Provider Organization (PPO) Plans
PPOs remain the most common employer-sponsored health plan design. Nearly half (46%) of employers nationwide offer a PPO, making it the most popular plan type. PPOs offer:
- Access to broad provider networks
- Ability to see specialists without referrals
- More predictable out-of-pocket costs
You’ll see reduced pricing when using in-network physicians, hospitals, and specialists, but still have the flexibility to seek out-of-network care (typically at a higher cost). The trade-off? PPOs generally carry higher premiums compared to HDHPs.
PPO vs. HDHP with HSA
| PPO Pros | PPOs Cons | HDHP with HSA Pros | HDHP With HSA Cons | |
| PPO requires no Primary Care Physician. Offers lower deductibles and a broad network of providers. | Higher premiums (as compared to HDHPs). | HDHPs offer lower premiums and triple tax advantages. Enrollees can put aways funds, pre-tax, to pay out-of-pocket health care costs. | HDHPs require a Primary Care Physician. Due to costs, HDHPs may discourage members from seeking medical care. | |
| No referrals needed for specialists. Lower out-of-pocket maximum. | Costs are higher when using an out-of-network health care provider. | People ages 55 and up are allowed a catch-up contribution of $1,000. | Those who seek care but underfund their HSAs are often caught short. Out-of-network treatment comes with higher costs. | |
| May have access to a tax-advantaged Flexible Spending Account (FSA) to pay out-of-pocket health care costs. | FSA funds are “use it or lose it” and do not carry over from one plan year to the next. | HSAs offer triple tax advantages. Funds roll over from year to the next. Members can take the funds if they change jobs or retire. | An HDHP may work best for younger, healthier people with few or no medical conditions requiring regular care. Others may find an HDHP is not a good fit. |
During your group’s next open enrollment, consider your choices, potential costs as well as tax-savings, and your future health care needs. CaliforniaChoice offers more than a dozen HSA-qualified plans, including HMOs and PPOs. If you want to explore an HSA-qualified plan, talk with your employer.