What Qualifies as a High Deductible Plan for HSA?

When it comes to choosing a health savings account (HSA), understanding what qualifies as a high deductible plan is crucial. A high deductible health plan (HDHP) is a type of insurance plan that meets specific criteria set by the IRS for eligibility to open or contribute to an HSA. Here's what you need to know:

Qualifications for an HDHP:

• The plan must have a higher annual deductible than typical health plans.
• It must also have a maximum limit on the sum of the annual deductible and out-of-pocket medical expenses that you must pay for covered expenses.
• HDHPs may have lower monthly premiums than traditional health plans, making them an attractive option for those who want to save on premiums and have access to an HSA.

Additional Details:

• HDHP deductibles and out-of-pocket maximums are set annually by the IRS.
• For 2021, the minimum deductible for an individual is $1,400 and $2,800 for a family.
• The out-of-pocket maximum cannot exceed $7,000 for an individual and $14,000 for a family.
• HDHPs can cover preventive care services before meeting the deductible.

Having an HSA paired with an HDHP can provide tax advantages and savings opportunities for healthcare expenses. It's important to consult with a financial advisor or healthcare provider to determine if an HDHP is the right choice for you.

Understanding what qualifies as a high deductible plan (HDHP) is essential if you're considering a health savings account (HSA). A high deductible health plan must adhere to specific criteria established by the IRS, allowing you to maximize your savings. Here’s everything you should know about how to qualify.