Using Your HSA and High-Deductible Plan

HSAs and high-deductible health plans (HDHPs) offer nice tax benefits — and help you save money on your monthly health insurance costs.

So how should you use your HSA and high-deductible health plan?  

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Making The Most Of Your Health Savings Account

You never really know when you'll need costly medical care. But with health insurance coverage and money in a Health Savings Account, you'll always be ready.

That's why it's important to make sure you contribute funds into your HSA regularly.

The funds in your HSA can pay for just about any health-related expense — including bandages, cough medicine, durable medical equipment, and copayments for doctor's office or hospital visits.

It's easy to make regular deposits with your employer's cafeteria plan. This puts savings into your HSA directly from your paycheck. If your employer doesn't offer the direct deposit option, you can make regular contributions yourself, and get a refund when you file your income taxes.

You'll never lose any of your savings, either. Every year, your HSA funds roll over and earn interest. And the money that goes into your HSA is yours to keep — even if your employer contributes funds.

Coverage With Your High-Deductible Plan

Before you can open a Health Savings Account, you'll need to enroll in a high-deductible health plan (HDHP). Any plan is HSA-compatible if it has a deductible higher than $1,100 for individual plans or $2,200 for family plans.

High-deductible coverage is different than plans with lower deductibles. Why? Because you'll be responsible for a larger portion of your health care costs.

The upside is that plans with higher deductibles have lower monthly premiums. The downside is that you’ll be paying more money out of your pocket when you receive care.

That's where the savings in your Health Savings Account come in. The idea is to put aside enough tax-free money to pay for your deductible. As you save more money, you can move to a health insurance plan with a higher deductible — so your monthly premiums will be even lower.

Many high-deductible plans will also “waive the deductible” for preventive care — including routine doctor's office visits and annual physicals.

If your HDHP provides this coverage, you can continue to see your doctor regularly and only make a small copayment. If it doesn’t, you can use your HSA funds to pay for this care.

Generally speaking, high-deductible health plans provide what's known as "catastrophic coverage." This means you'll be protected from high medical bills, in case of a sudden serious illness or accident.

A deductible over $1,100 might seem high, but not when compared to serious medical bills adding up to tens of thousands of dollars.

Exploring Your Options

Even though there are a lot of benefits of HSAs, that doesn’t mean they're right for everyone. We all have different health and budget needs — and there's no such thing as a one-size-fits-all health plan.

HSAs and HDHPs are typically best for people who don't often need to visit the doctor, but want catastrophic coverage and a way to save money tax-free.

If you're unsure if a Health Savings Account is right for you, it's a good idea to get quotes and expert advice from licensed agents.

With our Instant Quote Tool, you can view and compare HSA-compatible plans online. You can also get competitive quotes from multiple agents, or speak with an agent directly.

All our services at Go Health Insurance are no-risk, no-obligation, and absolutely free.

Learn more about Health Savings Accounts.