HDHP vs PPO calculator: which health plan really costs less
HDHP with HSA or PPO — how do you tell which one is cheaper?
Count the whole year, not the premium: a year of premiums, plus what you would pay through the deductible, coinsurance and out-of-pocket cap, minus employer HSA money, minus the income-tax and payroll-tax you skip on pre-tax contributions and premiums. On this page's example (Self-only coverage, $5,000.00 of expected care, 22% marginal rate plus 7.65% payroll tax) the PPO comes out $33.46 a year cheaper — and the two plans trade places at $4,665.40 of yearly care.
US employer health plans, open-enrollment comparison. IRS HDHP thresholds and HSA limits for 2027 are built in — every other number is yours: no market premiums, no assumed rates.
A surprise medical bill is exactly what an emergency fund is for — size yours here.
Your year
Your own estimate of the year's bills at the plan's allowed rates, before the plan pays its share. Last year's explanation-of-benefits total is a good starting point. Federal plus state, the rate on your last dollar — the bracket you are in, not your average rate. This page keeps no tax tables: the rate is yours.
Money taken pre-tax through payroll also skips Social Security and Medicare tax. Keep the form's starting value if both are withheld from your pay; switch to the Medicare-only share once your wage is past the Social Security wage base, or zero when these dollars do not run through payroll. Most employers run the employee share of premiums through a cafeteria plan, so it skips income tax and payroll tax too. Untick this if yours does not — skipping this saving quietly favours the low-premium plan. Adds the $1,000 statutory catch-up to your own HSA limit. The catch-up is per person and goes only into that person's own HSA — a spouse's catch-up needs the spouse's own account.
Plan A
The share of each bill YOU pay between the deductible and the out-of-pocket maximum. A plan that pays eighty percent leaves you twenty.
Your payroll election for the year. Employer HSA money goes in its own field above — the two are added when the legal limit is checked.
Plan B
The year, side by side
At $5,000.00 of expected care for the year, PPO costs less: $3,329.82 against $3,363.28 — $33.46 apart.
The plans trade places at $4,665.40 of yearly care — below and above that line, the cheaper plan is a different one.
A net cost below zero is not an error: employer HSA money plus the tax savings covered the whole year's premiums and care, and then some.
Where the money goes
| Line | HDHP with HSA | PPO |
|---|---|---|
| Premiums for the year | $1,080.00 | $3,720.00 |
| Your care: deductible, coinsurance, capped | $3,400.00 | $950.00 |
| Employer HSA money (comes off) | $500.00 | $0.00 |
| Income-tax saving (comes off) | $457.60 | $994.40 |
| Payroll-tax saving (comes off) | $159.12 | $345.78 |
| Net cost of the year | $3,363.28 | $3,329.82 |
| Highest in-network year | $5,963.28 | $4,379.82 |
| HSA-qualified: 2027 IRS thresholds | yes | no |
The out-of-pocket maximum caps only covered, in-network care. Out-of-network treatment, balance billing and services the plan does not cover sit outside every number in this row.
A 2027 note: the IRS has not yet published the health-FSA contribution limit for 2027. The current limit is $3,400 for 2026 (Rev. Proc. 2025-32, § 4.15; carryover up to $680 where the plan allows one) — take your own 2027 cap from your employer's enrollment materials.
How the yearly cost is computed
- Premiums for the year: your per-paycheck premium times your number of paychecks — entered the way your benefits page shows it, so nothing is annualised by guesswork.
- Your share of care: expected spending runs through the deductible, then your coinsurance share applies, and the total stops at the out-of-pocket maximum.
- Minus the money that comes back: employer HSA dollars, and the income tax and payroll tax you never pay on pre-tax contributions — and, with a cafeteria plan, on the premiums themselves. Skipping the premium part is the classic mistake: it quietly favours the low-premium plan.
- Every line is rounded to the cent first and then added, so the table always sums to its total; the crossing point is solved on the same arithmetic and lands within a cent — not read off a chart.
- Premiums, deductibles, copays and networks of specific plans: only your employer's enrollment pages know them. Nothing here is pre-filled from market data.
- Your expected medical spending is your own estimate, not ours.
- Tax tables: you enter your marginal rate and your payroll-tax rate; the page holds none.
- Copays as a separate mechanic: all spending runs through deductible and coinsurance, which overstates the out-of-pocket cost of copay-heavy plans.
- Free preventive care: the law covers it before the deductible; here it counts as ordinary spending.
- Separate drug deductibles, and embedded per-person deductibles inside family plans.
- Out-of-network care: one coinsurance rate and one cap per plan, and the legal cap limits only covered in-network care — balance billing is not limited by anything on this page.
- What happens to leftover money: an unused FSA balance is forfeited beyond the carryover while an HSA stays yours and can be invested — that difference is real and is not priced in here.
- Full HSA eligibility: only the two numeric IRS thresholds are checked. Other first-dollar coverage, a spouse's general-purpose FSA, Medicare enrollment and partial-year eligibility are on you to check.
- The 2027 health-FSA limit: not yet published by the IRS when these constants were captured.
IRS constants were captured on 2026-09-15 from the primary documents linked below and are printed with their sources; every other figure on this page is computed from your own inputs.
Sources: Rev. Proc. 2026-24 (IRS) · Rev. Proc. 2025-32, § 4.15 · IRS Publication 969
This is arithmetic on the numbers you enter — not tax, legal or benefits advice. Plans differ in ways this page names above; read your own plan documents before enrolling.
Budget the whole year, not just the health plan
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See the budget app — $49Questions people ask
Is the HDHP always cheaper if I am healthy?
No — that is exactly what the crossing point is for. Below it one plan wins, above it the other, and employer HSA money plus the tax savings can flip the answer in both directions. A rich PPO can lose a low-spend year and win a high-spend one, or the reverse — it depends on each plan's own numbers, not on a rule of thumb.
Why does the calculator ask about payroll (FICA) tax?
Pre-tax contributions and cafeteria-plan premiums skip Social Security and Medicare tax on top of income tax. Comparisons that count only the income-tax saving systematically favour the plan with the lower premium — on this page's own example, leaving FICA out is enough to change which plan looks cheaper.
Can I contribute to an HSA with any plan?
No. The IRS sets a minimum deductible and a maximum out-of-pocket for HSA-qualified coverage each year; this page checks both 2027 numbers and says so when a plan fails them. The non-numeric conditions — no other first-dollar coverage, no general-purpose FSA in the household, no Medicare — are listed as limits, because no calculator can check them for you.
HSA or FSA — does the difference matter for this comparison?
For one year's cash flow both are pre-tax money and the arithmetic is the same. The difference is what survives December: an FSA forfeits whatever exceeds the carryover, an HSA is yours forever and can be invested. This page prices the single year, so that difference is named as a limit rather than silently priced at zero.
