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How an HSA High Deductible Health Plan Works
HSA-qualified plans refer to the High-Deductible Health Plans used in conjunction with a Health Savings Account.
These plans are usually PPO plans with in-network and out-of-network benefits, but have significant differences from traditional PPOs.
Here are some key features of how these plans work:
HSA Requirements
HSA-qualified health plans must meet specific requirements set up by the Internal Revenue Service.
These include minimum and maximum deductibles, limits on out-of-pocket expenses, and limits on care provided pre-deductible. See our HSA page for more information.Deductibles
HSA-qualified plans have a plan deductible that must be met before any services are covered. The plan may waive the deductible for preventive services, but is not required to by law.
The deductible itself must be above a certain amount, but usually are between $2,200 and $4,000 for individual coverage and double that for family coverage. Members must be prepared to pay out-of-pocket for these expenses.
Copayments & Coinsurance
HSA-qualified plans usually have copayments for preventive care pre-deductible and coinsurance for services post-deductible. Prescription coverage can have either or both.
Preventive Care
Federal law allows (but does not require) HSA-qualified HDHPs to cover preventive care pre-deductible.
Each health plan defines "preventive" care. Some plans include more services than others, particularly large group offerings. Most small group plans only include one annual exam and a few select screening tests.
Prescription Coverage
Prescription drugs are treated differently with HSA-qualified plans. They are generally subject to the plan deductible. (Some plans may exclude drugs they classify as preventive.)
Members pay out-of-pocket the full prescription drug cost. Prescription drugs are counted towards the deductible and the maximum out-of-pocket.
Provider Networks
Most HSA qualified plans are PPO plans that have both in-network and out-of-network benefits, allowing a greater choice of providers.
Out-of-network costs can be much higher than in-network. A few new plans are HMOs, with benefits available only within the HMO network.