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Moving from a PPO or HMO to an HDHP and HSA

Lively · June 28, 2018 · 4 min read


Moving health insurance plans (or providers) is the most important benefits decisions you will make this year. It affects both your health and your wealth.

Health insurance is designed to deliver medical care and access, with set financial parameters. With that in mind, we will review why this goal can become somewhat convoluted and complicated when selecting a health plan.

How to Think About Healthcare

Health insurance creates an effective safeguard against yearly health costs. It allows individuals and families to pay set (and structured) amounts and cap their yearly health-related financial risk.

Which health insurance plan (or benefits offerings) will limit your financial risk while providing the most medical care and coverage? To complicate the matter, this needs to include all expected and unexpected health costs. Forecasting for unexpected health costs might be impossible, but planning for them is not.

Let’s investigate common health insurance plans and structures to see which provide the “best” coverage for you and your family. AND, how to move from one health insurance plan to another.

PPO or HMO Health Insurance Plans

Over 70% of all employer-sponsored health plans are still high coverage plans like PPOs or HMOs. These plans offer higher levels of coverage, and lower yearly out-of-pocket maximums but require higher monthly premiums. Some employers may cover a part or all of these monthly premiums costs.

PPOs and HMOs do a great job of limiting yearly health expenses. They, however, must be renewed each year and provide no long-term health savings. As health insurance premiums rise, these plans get more expensive.


High deductible health plans (HDHPs) are growing in popularity. Employer-sponsored HDHPs have doubled in participation in the last five years. They help employers reduce growing benefits costs and keep employee monthly premiums low. Everyone enjoys lower monthly premiums!

HDHPs do have higher out-of-pocket costs when compared to PPOs and HMOs. In order to reduce your financial exposure, use tax-free HSA contributions to ensure you have money for medical expenses, just in case. Think of an HSA an as insurance on your health insurance. More on that below.

Short-Term Health Insurance Costs to Consider

As healthcare cost rise, out-of-pocket medical expenses and monthly premiums are pulling more and more from your paycheck. Short-term health insurance costs require you to better understand your expected healthcare usage. These costs include expected preventative care, prescriptions and doctor visits, to name a few. Coupled with your fixed monthly premiums costs, this helps outline your expected short-term health costs.

Long-Term Health Insurance Costs to Consider

PPOs, HMOs, and HDHPs all are limited by yearly renewals or employment. This means at best, they help you plan for health costs 12 months into the future. What about next year? The ten years after? Or retirement?

An HSA is a designated savings vehicle to save money for health expenses. It allows individuals and families to save pre-tax money for qualified medical expenses. You can save, spend or invest HSA funds. You can save them for years to come for health expenses. After the age of 65, they can be used for anything, just like a 401(k) or IRA.

An HSA can only be used with an HSA-qualified health insurance plan, like an HDHP.

Moving Health Insurance Plans

Balancing short-term and long-term health insurance costs is the reason many Americans are switching more PPOs or HMOs to HDHPs (and adding an HSA). HDHP lower monthly premium costs. HSA create long-term health savings. They are the 1-2 punch in health benefits.  As you go through this process, here are some tips for changing health insurance plans:

When or if you do decide to change health insurance plans, and move from a PPO or HMO to an HDHP coupled with an HSA, you need to have a clear view of your short and long-term health costs. So that the health insurance plan you have today, helps you limit your health expenses well into retirement. Start investing in your health today.

If you need more help with health account decisions, check out our blog. We will make you a healthcare benefits expert in no time, without any extra work or effort on your end.



Lively is the modern HSA experience built for—and by—those seeking stability in the ever-shifting healthcare landscape. By harnessing modern innovation and deep industry expertise, Lively is committed to bridging today’s savings with tomorrow’s unknowns. Unlike traditional institutions hindered by bureaucracy, Lively’s commitment extends beyond initial set up to providing dedicated, ongoing support and education for every step. So each HSA can reach its maximum potential with minimal headache.

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Lively · May 9, 2024 · 3 min read

On May 9, 2024 the Internal Revenue Service announced the HSA contribution limits for 2025. For 2025 HSA-eligible account holders are allowed to contribute: $4,300 for individual coverage and $8,500 for family coverage. If you are 55 years or older, you’re still eligible to contribute an extra $1,000 catch-up contribution.

comparing hsa versus fsa


What is the Difference Between a Flexible Spending Account and a Health Savings Account?

Lauren Hargrave · February 9, 2024 · 12 min read

A Health Savings Account (HSA) and Healthcare Flexible Spending Account (FSA) provide up to 30% savings on out-of-pocket healthcare expenses. That’s good news. Except you can’t contribute to an HSA and Healthcare FSA at the same time. So what if your employer offers both benefits? How do you choose which account type is best for you? Let’s explore the advantages of each to help you decide which wins in HSA vs FSA.

Benefits of HSA employer matching

Health Savings Accounts

Ways Health Savings Account Matching Benefits Employers

Lauren Hargrave · October 13, 2023 · 7 min read

Employers need employees to adopt and engage with their benefits and one way to encourage employees to adopt and contribute to (i.e. engage with) an HSA, is for employers to match employees’ contributions.

Disclaimer: the content presented in this article are for informational purposes only, and is not, and must not be considered tax, investment, legal, accounting or financial planning advice, nor a recommendation as to a specific course of action. Investors should consult all available information, including fund prospectuses, and consult with appropriate tax, investment, accounting, legal, and accounting professionals, as appropriate, before making any investment or utilizing any financial planning strategy.



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