How to Tell If You Have a High Deductible Health Plan Should You Have an HSA Too?

Understanding your health plan can be confusing, especially when it comes to high deductible health plans (HDHP) and health savings accounts (HSA). If you’re wondering whether you have a high deductible health plan and if you should have an HSA too, here are some key indicators to help you determine:

1. Check your deductible amount: If your health plan has a high deductible – typically over $1,400 for an individual and $2,800 for a family – then you likely have an HDHP.

2. Look for out-of-pocket maximum limits: HDHPs often have higher out-of-pocket maximum limits compared to other health plans.

3. Consider the coverage for preventive care: HDHPs usually cover preventive care services before meeting the deductible, which is a good indicator of having an HDHP.

Having an HSA along with a high deductible health plan can offer several benefits:

1. Tax advantages: Contributions to an HSA are tax-deductible, grow tax-free, and withdrawals for qualified medical expenses are also tax-free.

2. Savings for future healthcare expenses: Having an HSA allows you to save money for current and future medical expenses, including those not covered by insurance.

3. Flexibility and portability: HSAs are portable and belong to you, so you can take it with you even if you change jobs or insurance plans.

4. Ensure you are eligible for an HSA: To contribute to an HSA, you must be enrolled in an HDHP, not be claimed as a dependent on someone else's tax return, and not be enrolled in Medicare.

Wondering how to spot a high deductible health plan (HDHP)? Start by checking the deductible amounts; anything over $1,400 for an individual or $2,800 for a family usually means you have one. Plus, HDHPs often set higher out-of-pocket maximums.