When it comes to health insurance, you probably think about costs in terms of monthly or annual premiums. While these expenses are important, deductibles also factor into the overall cost of coverage. Your plan’s deductible is the amount of healthcare spending you will need to accumulate and pay for before your plan’s benefits begin to apply.
Deductible amounts vary by plan and provider. Many times, a trade-off exists in the relationship between premiums and deductible amounts. A plan with high monthly premiums may have a lower deductible, and a plan with a high deductible may have lower premiums.
Do Deductibles Affect HSA Eligibility?
A health savings account (HSA) is a common way to offset costs in high-deductible health plans. These accounts allow you to save money tax-free to spend on healthcare-related expenses, including doctor visits and prescriptions. If you have a high-deductible health insurance plan, an HSA can be beneficial since you can spend your HSA funds on expenses related to healthcare without worrying about meeting a specific deductible threshold.
Do Your Research
HSA advisors often point out that people interested in these types of accounts should do some research before signing up for a plan. While HSAs are usually reserved exclusively for plans with high deductible amounts, this is not always the case.
Some HSA advisors encourage their clients to consider the thresholds imposed by the Internal Revenue Service (IRS) on high-deductible plans before signing up for coverage. In order to qualify for an HSA, your plan usually has to have a high deductible, but this doesn’t mean that an HSA is always the answer to high-deductible plans. To find HSA advisors, visit this website.
According to the IRS, contributions to HSAs are limited based on factors like filing status. Because someone on a family health plan will have more freedom to contribute funds to an HSA compared to an individual who files taxes as single, the limitations imposed by the IRS can affect your healthcare decisions in the future. There are also factors like out-of-pocket maximums to consider.
To learn more, you’re encouraged to contact your plan provider directly. You can also contact the IRS online or by phone to discover any limitations, restrictions or benefits that govern your ability to utilize an HSA.
Read a similar article about open an HSA here at this page.
