Understanding how deductibles work for an HSA

High-deductible health plans (HDHPs) are a common option for those looking to save on healthcare costs while still providing comprehensive coverage. With an HDHP comes a deductible, which is a key component of how Health Savings Accounts (HSAs) operate. So, how does a deductible work for an HSA?

Here's a simple breakdown:

• When you enroll in an HDHP, you are required to pay a certain amount out of pocket before your insurance kicks in. This amount is the deductible.
• Contributions to your HSA can help you meet this deductible. You can contribute pre-tax funds to your HSA, reducing your taxable income for the year.
• Once you've met your deductible, your insurance coverage begins, and you'll only be responsible for any copayments or coinsurance.
• If you don't use all of the funds in your HSA to cover medical expenses in a given year, the remaining balance rolls over to the next year, continuing to grow tax-free.
• Having an HSA can offer financial flexibility and peace of mind when it comes to managing healthcare expenses.

Understanding high-deductible health plans (HDHPs) can seem daunting at first, but they can actually help you save significantly on healthcare expenses. When you enroll in an HDHP, you're tasked with meeting a deductible, and this is where your Health Savings Account (HSA) comes into play. Simply put, the deductible is the amount you must pay out-of-pocket before your insurance steps in to assist.