Open enrollment is one of the most consequential financial decisions most people make with the least amount of thought. The plan you pick sets your premium, your deductible, your access to doctors, and whether you can contribute to an HSA — one of the most powerful tax accounts available. Here is the 2026 framework for making the right call.
What changed in 2026
- HSA contribution limits increased. The IRS adjusts limits annually; check IRS.gov for the current figures (historically ~$4,150 single / ~$8,300 family). An HDHP-eligible plan unlocks these limits.
- HDHP thresholds also adjust — the IRS minimum deductible and out-of-pocket maximum for a plan to qualify as HDHP change most years.
- Telehealth and HDHP interplay changed. Congress has extended provisions allowing HDHPs to cover telehealth before the deductible is met; verify your plan's terms each year.
- Formulary and network transparency improved. Most employer portals now offer side-by-side plan cost estimators that factor in your prior-year utilization.
The three main plan types
| Plan Type |
Premium |
Deductible |
Network |
Referrals needed |
HSA eligible |
| HMO |
Lowest |
Low to moderate |
In-network only |
Yes (PCP required) |
Only if HDHP-structured |
| PPO |
Moderate to high |
Low to moderate |
In- and out-of-network |
No |
Only if HDHP-structured |
| HDHP |
Low to moderate |
High ($1,600+ single / $3,200+ family in 2026) |
Varies |
Varies |
Yes |
Note: An HDHP can be structured as an HMO or PPO network — "HDHP" refers to the deductible structure and HSA eligibility, not the network type.
The total-cost framework
Do not compare plans by premium alone. Use this formula per year:
Total plan cost = Annual premium you pay + Expected out-of-pocket costs
For the HDHP option, subtract the value of the HSA tax benefit:
HDHP effective cost = Annual premium + Expected OOP − HSA tax savings on contributions
If your employer contributes to your HSA, subtract that too.
Example walkthrough (illustrative ranges):
|
PPO |
HDHP |
| Annual premium (employee share) |
~$2,400 |
~$1,200 |
| Expected OOP (1 doctor visit, 1 prescription) |
~$400 |
~$600 |
| HSA contribution tax savings (~22% bracket, $2,000 contributed) |
n/a |
~$440 |
| Estimated total cost |
~$2,800 |
~$1,360 |
In this scenario the HDHP wins by ~$1,440 annually for a low-utilization person. The math flips for someone who expects to hit the deductible — run your own numbers.
How to pick
- Estimate your expected healthcare use. Chronic condition, regular specialist visits, planned procedures → favour PPO or HMO. Healthy with rare care → favour HDHP.
- Check whether your preferred doctors are in-network. A PPO with your specialist is worth more than a cheaper plan that forces you out of network.
- Calculate the HDHP break-even point. Premium savings + HSA tax benefit vs. additional OOP exposure. If you can afford to cover the deductible from savings without stress, HDHP usually wins financially.
- Check your employer's HSA contribution. Many employers seed the HSA with $500–$1,500. That directly offsets the higher deductible.
- HMO if: lowest total premium is the priority, you have a good PCP relationship, and all your care is in-network.
Common mistakes
Choosing by premium only. A $50/month premium plan with a $6,000 deductible and no HSA benefit is expensive the moment you need care.
Not contributing to the HSA if you pick an HDHP. The HSA is the entire financial logic of the HDHP. Choosing HDHP and not funding the HSA means you have the downside (higher deductible) without the upside (tax-free savings vehicle).
Ignoring the out-of-pocket maximum. This is your catastrophic protection number. A plan with a lower OOP max costs more in premiums but caps your worst-case scenario.
Treating last year's plan as the default. Plan structures, premiums, formularies, and networks change annually. Review your options every open enrollment.
What to skip
- Supplemental plans (hospital indemnity, accident) unless your HDHP OOP max creates unmanageable financial risk — they add complexity and cost.
- Choosing HDHP without an emergency fund. If you cannot cover the deductible in cash, an HDHP is a financial trap, not a tax advantage.
- Ignoring the dental and vision elections. These are separate elections with separate cost-benefit math; do not let health plan fatigue cause you to skip them.
FAQ
Can I have both an HSA and an FSA?
Not simultaneously in the standard form. If you have an HDHP, you can have an HSA. If your plan does not qualify for an HSA, you can have a healthcare FSA. A limited-purpose FSA (for dental and vision only) can coexist with an HSA.
What happens to my HSA if I switch to a PPO next year?
Your existing HSA funds remain yours and can be spent on qualified medical expenses any time. You just cannot contribute new money to the HSA while enrolled in a non-HDHP plan.
Does HDHP always have higher out-of-pocket costs?
Not necessarily. Many HDHPs have lower OOP maximums than you might expect. Compare the OOP maximum, not just the deductible.
When is open enrollment?
For employer plans, typically a few weeks in the fall (often October–November) for coverage starting January 1. Outside that window, you can only change coverage after a qualifying life event (marriage, birth, job change).
Where to go next
See How to use an FSA in 2026, What is a health savings account in 2026, and How to calculate take-home pay in 2026.