HSA in New Jersey

ADP
LWkG40

Go to company page ADP

LWkG40
Sep 7, 2021 8 Comments

ADP will contribute $600 per year to the HSA. Plus it seems like folks from New Jersey will not be able to reduce the taxable wages. Anyone there can confirm?

Also - the high deductible plans ($1800 plus) are the ones that offer HSA. Is it really worth it for a single person?

HSA in New Jersey

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TOP 8 Comments
  • AbleTo
    10xenginer

    Go to company page AbleTo

    10xenginer
    HSA are taxed in NJ. Your employer contributions will not be taxed, but any gains realized from employer contributions will be taxed. E.g. your employer contributes $600 and you invest it and now its worth $650. You sell to pay for an expense you will be taxed on the $50 gain but not the $600 contribution. Your contributions taken from your paycheck will be taxed as regular income on your NJ return, but it will be tax exempt on your federal return.

    HSAs are typically better for really healthy or really sick people. It's counterintuitive but it's because HSA have the best cost share after the deductible has been met, so if you are really sick you will hit that deductible very early in the year.

    If none of this makes sense to you just go with the PPO plan. I hate to say it but most people don't understand HDHP well enough to fully utilize it and end up just paying more for their healthcare.
    Sep 7, 2021 2
    • ADP
      LWkG40

      Go to company page ADP

      LWkG40
      OP
      Thanks for this.

      Sharing the options I am working with right now.

      - I can just skip and go elsewhere (PPO).
      - I can (hope to) stay healthy and get the HSA plan. Not use it since the deductible is atrocious.
      - I can get the non-HSA plan and maximize the next few months until enrollment by getting all preventative and exploratory yearly checkups done. And then switch to HSA next year.

      I am single in my early 40m so I can probably risk being this cautious.

      Thoughts?
      Sep 7, 2021
    • AbleTo
      10xenginer

      Go to company page AbleTo

      10xenginer
      Would need to know co-pays & coinsurance to do a proper comparison, but based on the screenshot HDHP is better if you hit deductible 2553 + 1750 < 4706 + 650). If you factor in the employer $600 then your deductible is technically 1150. So even if you dont hit the deductible you might still come out ahead given the difference in premiums. Yeah I think the employer $600 actually makes the HDHP a better choice in most cases.
      Sep 7, 2021
  • How much healthcare do you expect to use? You can actually do the math to see which one is cost effective
    Sep 7, 2021 2
    • ADP
      LWkG40

      Go to company page ADP

      LWkG40
      OP
      I really do not have many health expenses. I am a reasonably healthy man in my early 40s. Single with no dependants. Super tempted to start an HSA account, I admit. Have never had one before. But the math does not add up.
      Sep 7, 2021
    • If you spend less than $600 in healthcare next year the math does add up.
      Sep 7, 2021
  • The high deductible plan is absolutely worth it depending on what doctors you go to. If you have a condition, it’s worth it. If you’re going to be pregnant, it’s worth it. If you’re going to have any procedure done that year, it’s worth it. If you receive therapy regularly, it’s worth it. The only time the high deductible plan isn’t worth it is if you’re the kind of person who goes to the annual check up and that’s it. If you do anything else, the plan is worth it. Heck, I ended up in the ER overnight when I was 22 and was like fuck that I’m getting the high deductible plan after 7000 of bills showed up in the mail.
    Sep 7, 2021 1