How Can I Enroll In An Hdhp
If you dont have access to an employer-sponsored plan, Medicare, or Medicaid, youll be purchasing your coverage in the individual/family market.
In virtually all areas of the country, HSA-qualified HDHPs are for sale in the exchange/marketplace, and are also available for purchase directly from health insurers .
The open enrollment window health coverage runs from November 1 to January 15 in most states, although there are some states that have different deadlines. Outside of open enrollment, youll need a qualifying event in order to sign up for any major medical health plan, including HDHPs.
If your employer offers an HDHP, you can enroll in that option during your employers open enrollment period.
How Do You Let Your Employees Know That Your Hdhps Are Hsa Eligible
As an employer, you can make this clear to your employees through your benefits enrollment literature and enrollment process. Since HDHPs, on their own, sometimes look less attractive than non-HDHP plans, you should make a concerted effort to communicate how an HSA is specifically designed to work in conjunction with an HDHP to bring down total costs. To be clear, there are pros and cons with HDHP with HSA health plans, so its important to spend some time educating your workforce on these options through presentations, case studies, educational videos and even 1:1 counseling.
Whats particularly tricky about an HDHP is that a participant must first take the first hits beyond non-preventive care. If the enrollee is healthy and doesnt consume much health care, it almost feels to them like they have no insurance. Every time they go to the doctor or get a prescription, they wind-up paying 100% out of pocket. Sure, they get the benefit of in-network negotiated billing rates, but thats about it.
People considering an HDHP simply need to remember that insurance is really designed for unpredictable things that cost a lot but dont happen often. As Harry Sit of The Finance Buff likes to say, You dont use auto insurance when you get an oil change or when you have your brakes replaced. You dont use homeowners insurance when you replace a worn-out garage door. You just have to get used to your health insurance working the same way.
What About Standardized Plans
There was initially some worry about HSA-qualified plans being driven out by standardized plans, but that has not come to pass. HHS introduced optional standardized plans for 2017 on Healthcare.gov, and included a bronze HDHP in the standardized plan designs for 2018. But they did away with the standardized plan designs altogether as of 2019. Instead, they have worked to develop ways to put more of a focus on HDHPs and working to differentially display them on the plan comparison screen, to make them more obvious to consumers .
In California, the exchange requires all plans to be standardized, and theyve always had a standardized HSA-qualified plan design .
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Health Savings Accounts Get Mixed Reviews
The country is largely split over the question of whether health savings accounts are a wise coverage solution on a large scale and whether HSAs help or hurt the nations health care system.
Proponents of HSAs argue that people tend to be more careful with their own health care costs when theyre paying part of the bills themselves. So instead of going to a doctor for every cough, cut, or cramp, HSA users would have an incentive to be less wasteful with their health care spending, and maybe even take the time to shop around.
They say that the cumulative effect will be a nation of health consumers whose behavior would lower health care costs, while injecting price and quality competition into the medical marketplace. And tax advantages, they say, could lure the uninsured into lower-cost, high-deductible plans, reducing the ranks of the uninsured and possibly even nudging them into healthier lifestyles.
Critics of HSAs argue that health savings accounts benefit the young and healthy, while those with regular medical problems or who are older may end up paying more if they select an HDHP/HSA combination, because they tend to drain their savings with more frequent up-front medical expenses.
Who Can Open An Hsa
To qualify for an HSA, you must meet the following criteria:
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Why Isnt My Plan Hsa Eligible
In actuality, few are HSA-eligible, because the IRS specifiesdeep in its guidelinesthat except for preventive care, plan may not provide benefits for any year until the deductible for that year is met. That means that a slightly more generous plan, which pays for any portion of things like prescription drugs Mar 15, 2021.
Hsa Information Center: A Resource For Employers And Their Employees
Please visit our HSA Information Center to learn more about HSAs. The HSA Information Center offers valuable information and tools for you and your employees such as:
Understanding affordable health insurance options
IRS regulations relating to HSAs
* Underwritten by Blue Shield of California Life & Health Insurance Company. Pending regulatory approval.
1 Although most individuals who enroll in an HDHP are eligible to open an HSA, you and your employees should consult with a financial adviser to determine if an HSA and HDHP are a good financial fit for you. Blue Shield does not offer tax advice or HSAs. HSAs are offered through financial institutions. For more information about HSAs, eligibility, and the law’s current provisions, you and your employees should ask your financial or tax adviser. HSA plan features may vary by institution and may be subject to change by those institutions.
2 The deductible accrues to calendar-year copayment maximum. Please refer to the Certificate of Insurance and the group policy for exact terms and conditions of coverage.
3 The Simple Savings 3400/6800 is the only plan offered by Blue Shield of California Life & Health Insurance Company that may be used with any form of an employer-sponsored “wrap plan”. Underwriting criteria prohibits pairing its other health plans with a wrap plan at any time, with the exception of a Health Savings Account or employee-funded general-purpose Flexible Spending Account .
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Can I Open A Health Savings Account On My Own
Yes, you can open a health savings account on your own. By considering the advantages and disadvantages of HSA plans for individuals, you can determine whether it will work for you and your familys unique health and budget requirements. Because high-deductible health plans provide lower monthly premiums and a higher deductible, choosing a plan with an HSA option can be helpful for emergency situations.
However, for families who expect to visit a doctor or specialist multiple times a year for treatment, health plans like HDHPs may end up costing more out of pocket than the plan may be worth.
At HealthMarkets, we can simplify the process for you with our FitScore technology. With thousands of plans available nationwide, we can compare your unique needs to health insurance plans from more than 200 recognized insurance companies to find the right options for you.
Get your FitScore today, at no cost to you.
If I Experience A Qualifying Life Event Mid
Yes, you can switch your IYC HDHP to a non-HDHP plan design and enroll in the Health Care FSA mid-year if you experience a qualifying life event. However, if you are enrolled in a non-HDHP plan design with a Health Care FSA, you are not eligible to switch to an IYC HDHP with an HSA. The Health Care FSA election is made for the full year and you may not opt-out after the start of the plan year.
Find Cheap Health Insurance Quotes In Your Area
Deductibles and out-of-pocket costs for health insurance plans have soared since 2010. Deductibles alone have risen 67% about seven times as fast as wages and inflation. In 2015, the average individual deductible was $1,318, according to a 2015 Kaiser Family Foundation/Health Research & Educational Trust survey.
At the same time, a tool that could soften the blow the health savings account , which allows people to pay many of their health care costs with tax-deductible dollars is not available to most Americans with high-deductible plans. In 2016, 3,365 of the 4,058 plans on the federal exchange had deductibles greater than $1,300. But only 764 were HSA-eligible.
In actuality, few HDHPs are HSA-eligible because the IRS specifies deep in its guidelines that “except for preventive care, plan may not provide benefits for any year until the deductible for that year is met.” That means that a slightly more generous plan, which pays for any portion of things like prescription drugs or specialist visits or an X-ray before the deductible is met, is not HSA-eligible.
How The Aca Changed Hdhps
The Affordable Care Act did change a couple of rules regarding HSAs, effective in 2011:
- Prior to 2011, the penalty for HSA withdrawals for non-medical purposes was 10%. But it doubled to 20% on January 1, 2011. Account holders can avoid this fee as long as they either use their HSA funds for medical expenses OR wait to withdraw funds until theyre at least 65. After that, income tax applies to withdrawals for non-medical purposes, but theres no penalty.
- Prior to 2011, HSA funds could be used for over-the-counter medicines. But under the ACA, from 2011 through 2019, OTC medicines could only be purchased with HSA funds if a doctor prescribed them. That changed in 2020, however, with the Coronavirus Aid, Relief, and Economic Security Act , which permanently relaxed these rules, retroactive to January 1, 2020. Under the CARES Act, HSA funds can be used to pay for OTC medications, and also menstrual products.
Under ACA regulations, HSA-qualified plans must cover preventive care with no cost-sharing and without requiring the insured to meet the deductible first. Under HSA regulations, no other claims can be covered before the deductible is met . These two regulations have co-existed well since 2014, when all new HSA-qualified plans have also been ACA-compliant.
As a result of the COVID-19 pandemic, the IRS also relaxed the rules to allow HDHPs to pay for COVID-19 testing and treatment pre-deductible without compromising the plans HSA eligibility.
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Managing Your Hsa Through Healthequity
Through our tie to HealthEquity, you can have your claims information automatically sent to HealthEquity to let you manage your account 24/7. You can also use online tools such as:
- Document storage
- Apps to manage your account from your smartphone
If you use HealthEquity, be sure to check your preferences by signing in to regence.com and going to My account.
Learn more about HealthEquity online or call 1 346-5800.
Are You Eligible To Contribute To An Hsa
HSAs let you contribute pre-tax dollars to pay for qualified medical expenses. In 2022, you can contribute up to $3,650 to an HSA as an individual, or up to $7,300 at the family level . And if youre 55 or older, you get an additional $1,000 on top of whichever limit applies to you.
To qualify to contribute to an HSA, you must sign up for a high-deductible health plan . A plan is not an HDHP just because it has a high deductible HDHPs also have to follow other rules laid out by the IRS. In 2022, an HDHP must have a deductible of $1,400 or more for individual health coverage, or $2,800 or more for family health coverage. An HDHPs out-of-pocket maximum cannot exceed $7,050 for individual coverage or $14,100 for coverage at the family level .
HDHPs cannot pay for any non-preventive services before the aforementioned minimum deductibles are met. But with an HDHP, youre entitled to certain free preventive care services before the deductible is met. And, there are new rules in place that allow insurers the option to provide treatment for certain chronic conditions, like asthma and diabetes, under the preventive care umbrella, as well as testing and treatment for COVID-19. If your insurer offers these additional benefits, you may be eligible to receive covered treatment before meeting your deductible. Plus, you can use your HSA funds to pay your deductibles under your HDHP.
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Are You Eligible To Open An Hsa
The main requirement for opening an HSA is having a high-deductible health plan that meets IRS guidelines for the annual deductible and out-of-pocket maximum. To be an eligible individual and qualify for an HSA, you must also meet the following requirements.
You are not covered by any other non-HDHP health plan, such as a spouse’s plan, that provides any benefits covered by your HDHP plan.
You are not enrolled in Medicare.
You do not receive health benefits under TRICARE.
You cannot have received medical benefits from Veterans Administration for any non-service-connected disabilities at any time during the previous three months.**
You cannot be claimed as a dependent on another person’s tax return.
You are not covered by a general purpose health care flexible spending account or health reimbursement account . Alternative plan designs, such as a limited-purpose FSA or HRA, might be permitted.
* Cost-sharing reductions limit the out-of-pocket costs for Essential Health Benefits covered by Qualified Health Plans such as deductibles or coinsurance, an individual is responsible for as part of their coverage under a QHP. There are several categories of cost-sharing reductions that are based on annual household income and family size. Each insurance carrier will implement these differently, based on their specific plan design. See your plan details for the cost sharing adjustments.
Not All High Deductible Plans Are Hsa Eligible
As you may know, in order to contribute to a Heath Savings Account you need to be in a High Deductible Health Plan and you cant have other health coverage. Many people dont realize that just having a high deductible isnt by itself sufficient to make a health insurance plan a High Deductible Health Plan. Its possible even though your health insurance has a high deductible you are still not eligible to contribute to an HSA.
Therefore if your insurance from work has a high deductible but the company is not offering an HSA, its likely that the plan doesnt qualify as an HDHP. If youd like to contribute to an HSA on your own, you should ask specifically whether your insurance qualifies as an HDHP under the IRS definition. If a plan from the ACA marketplace doesnt say HSA in its name, chances are it isnt HSA-eligible.
Besides a high deductible, in order to qualify as an HDHP, a health insurance plan must also not offer any benefit beyond preventive care before you meet the annual deductible. An otherwise high deductible plan fails the HSA qualification when it tries to be nice and it gives you some benefits before you meet the deductible.
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Individual Deductible In A Family Plan
If a family plan offers both an individual deductible and a family deductible, in other words the plan will pay for one person when that person meets the individual deductible before the entire family meets the family deductible, the individual deductible must be higher than the minimum deductible for HDHP family coverage.
Example 1: A family plan has an individual deductible of $2,000 and a family deductible of $4,000 for 2019. Because this family plan will start paying on non-preventive care before the family spends the minimum deductible for HDHP family coverage, this plan isnt HSA-eligible.
Example 2: A family plan has an individual deductible of $4,000 and a family deductible of $8,000 for 2019. Because the individual deductible is higher than the minimum deductible for HDHP family coverage, this family plan can be HSA-eligible if it also meets other qualifying criteria.
If Someones Hdhp Coverage Began Midmonth When Would That Individual Be Hsa
HSA eligibility is determined on a monthly basis, based on HDHP coverage status as of the first day of a given month. In cases where HDHP coverage begins in the middle of the month, an individual that meets the HSA eligibility requirements would be eligible to establish and contribute to an HSA on the first day of the month following the month in which HDHP coverage started. For example, if Jane began her HDHP coverage on September 15, 2019, she would be eligible on October 1, 2019. But if Janes HDHP coverage had begun on September 1, 2019, she would have been eligible on the same day because she had HDHP coverage as of the first day of the month.
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Why Does It Matter If You Cant Get An Hsa
If you expect to have any health expenses, ever, an HSA allows you to pay them with tax-deductible dollars. You can use the money for your deductible, doctor and dentist bills, prescription copays, eye exams, contacts and prescription glasses, medical supplies from bandages to hearing aids the list of eligible expenses is long. It even includes expenses that may not be covered by health insurance at all, like laser eye surgery, guide dogs or fertility treatments.
Since almost everyone eventually faces health expenses, paying for them with pretax dollars can really help your bottom line.
Lets look at an example. You have income of $50,000 and youre facing medical bills totaling $3,000, perhaps because you want laser eye surgery to correct your vision, or you have a chronic condition that requires regular care and monitoring, or you had a baby or a worrisome symptom that required extensive medical testing. You can pay these expenses using any money you have in an HSA, as long as the account was established before you incurred the expenses.
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* Includes Social Security and Medicare taxes, federal income taxes and state taxes if applicable.
** Everyone pays 7.65% in Social Security and Medicare taxes, up to certain income limits, unless the HSA is offered through an employer cafeteria plan. The above table assumes the HSA is individually established by someone who is not self-employed.