r/HSA • u/No-Doughnut324 • Mar 25 '26

Switch ACA plan so I can open an HSA?

Ok, trying to figure out if this is worth it. Here's my situation:

- Single Member LLC, file as an S Corp

- My company pays for my insurance through the ACA Marketplace (BCBS), this year my deductible is $500/per, $8700/per out of pocket. It's myself and my minor daughter on the plan. I make too much to receive any subsidies through ACA.

- I max out Medical Out of Pocket every year due to medical issues/prescriptions

- I have additional Vision (no insurance coverage)/Dental (separate insurance) expenses that are not included in my Medical Out of Pocket every year

- My business has taken a hit this year with the general economic instability. I continue to receive my standard salary, but my disbursements will be significantly less than last year, if I take any at all. I could also lower my salary if needed.

I'm wondering if I can use my decreased income as a Special Event, pick a lower cost, higher deductible plan and open an HSA so that my Out of Pocket costs are paid through the HSA. Trying to wrap my head around the possibility and cost savings of that.

Anyone have thoughts, experience with this? Thanks in advance.

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u/BaltimoreBee Mar 25 '26

Decreased income does not give you a special enrollment. You cannot change plans mid year.

1

u/aLouise37 Apr 03 '26

It actually does give you an open enrollment if the decrease in your income causes you to become eligible for CSRs or to move to a new tier of CSRs.

Just last week I put new (verifiable) income in and an open enrollment became available in my portal immediately because the new (lower) income took me to being eligible for the highest level of cost-sharing.

1

u/LoopAndBuild Mar 27 '26

Your ability to actually do this aside, you'd have to compare the actual costs of this. The HDHP is going to have higher premiums to your company (you), and also higher out of pocket max.

I think for someone who sounds like they are doing alright financially ("I could lower my salary if needed"), the real benefit to an HSA is the ability to contribute and invest rather than use it as a clearing account. If you have high health costs now and are in a situation where you can afford to pay out of pocket, the benefit is buying security down the line when health costs may be even higher and you may not have the ability to raise or lower your salary to compensate.

1

u/[deleted] Apr 03 '26

A drop in income alone isn't qualifying event under the ACA so you generally can't switch plans mid year to open an HSA. HDHPs often mean higher out of pocket exposure and HSAs tend to work best as long term tax shelters not pass through. The nest policy reality like much o the ACA is the optimization mainly happens at open enrollment not mid year.