I Have a High Deductible Plan – How Does an HSA Work?

A growing trend in health insurance plans is a movement toward more ‘Qualified High Deductible Health Plans’ or QHDHP.  A QHDHP is different from a more traditional type of policy.  In a qualified plan, the deductible needs to be met before the insurance benefit applies (excluding preventative care).  QHDHP typically have higher deductibles than you may have encountered before – for 2015 & 2016, the minimum deductible is $1,300 for an individual and $2,600 for family coverage.

If you have a QHDHP, you are likely able to contribute to an HSA.  The idea behind an HSA is that saving money in the HSA will then give you the funds when you need the care to meet the higher deductible.  However, there is a limit to how much you can contribute to an HSA.  The limits are found here.  If you contribute more to the HSA than you need to reimburse your deductible, the funds can roll over from year to year.  In fact, some HSA providers will allow you to invest a portion in mutual funds.  Also, if you establish your HSA through your employer and change jobs the funds in the HSA are yours and you can take them with you.

A few key items to remember with a high-deductible plan.

• the entire deductible must be met before the insurance ‘kicks in’
• pharmacy is included in the deductible
• there are no co-payments prior to the deductible being met
• preventative care is covered at 100% (that’s the same for every Affordable Care Act-compliant plan)

If you have questions about Qualified High Deductible Plans, please give us a call at 800.303.6329 or send us a message.