How to Find HSA Eligible Plans:

Now that you have learned more about how health savings accounts work, you will need to find out if your current health insurance plan is HSA eligible. In many cases, as long as you have a high-deductible insurance plan, it will be automatically eligible. However, there are some restrictions.

No Co-Pay

Health insurance plans that offer a co-pay are not eligible for a health savings account. Even if the plan has a high deductible, you will not be able to use your HSA with this plan. This regulation is not expected to change, since the intent of the HSA program is to support insurance plans without a co-pay and plans that have a deductible that is over a specific limit.

If you currently have a co-pay health insurance plan, and would like to use your HSA to pay for your health care needs, you will need to find an insurance plan that is eligible. This can be done by narrowing your search to plans that feature a deductible that is over $1000 as long as it does not feature a co-pay.

The majority of insurance companies are now offering these plans, making it much easier to find an eligible health insurance plan for your HSA. If you are in doubt over a plan's eligibility, all you will need to do is ask if the plan is indeed eligible. Insurance representatives are fully trained in HSA regulations and will be able to assist you.

High-Deductible Insurance Plans

As mentioned previously, in order for a health insurance plan to be eligible for an HSA, its deductible must be greater than $1000 per calendar year. This does not mean that you will be forced to select the first $1000 deductible plan that you find. There is no maximum deductible amount required for eligibility, so long as it is over $1000.

The benefit of a high deductible insurance plan is that the monthly premiums are generally much lower than health insurance plans that offer low deductibles or co-payment plans.

The reasoning behind this regulation is quite simple. With an HSA and a qualified high deductible insurance plan, you are actually saving more money than you would with a co-pay or low deductible plan. Since the savings are greater, HSA eligibility has been limited to these high deductible plans.

Having the ability to pay for your health insurance premiums with your HSA can end up saving you money in the long run, particularly since you will be allowed to deduct your health care costs, so long as you do not itemize your deductions.

Employer Plans

As the popularity of HSA eligible plans grows, more employers are now offering the ability to switch from group HMO plans to higher deductible plans that are eligible. In the past, many group plans only offered an HMO, increasing the employee's costs for health care over time.

In addition to offering the ability of selecting an HSA eligible health insurance plan, many employers are now offering contributions towards your health savings account. Depending on your employer, they may match your own contributions, or set a minimum amount that they will contribute to your health savings account each year.

In this case, you may end up having your health care and health insurance costs come directly out of your employer funded HSA instead of your own pocket. The amount of money you can save by selecting this option is much greater than the immediate savings offered by an HMO or low deductible PPO plan.

In closing, high deductible, HSA eligible insurance plans offer you more health care options, less restrictions on the type of care you can receive and significant savings over time.

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