Many people don’t realize that just having a HDHP on its own doesn’t necessarily make it HSA-qualified. HDHPs have a higher deductible than traditional insurance plans, however, they have lower monthly premiums, which makes them attractive to both employers and individuals. Keep in mind that before you can contribute to your HSA, you must be enrolled in an HDHP. Balances roll over from year to year, even if you leave your employer.You can typically invest a portion of your balance in mutual funds, stocks, and bonds when you maintain a certain account balance.You have the option to invest a portion of the funds.At age 65, you can use the funds for any purpose without a penalty.In many cases, employers also contribute a matching dollar amount to the account.You receive tax-free withdrawals, earnings, and contributions.Plan holders can use their HSA to pay for 200+ eligible expenses, as outlined in IRS Publication 502. HSAs have become a popular option for those who want individual health insurance while lowering their overall health care costs. Contributions and out-of-pocket limits for HSAs and HDHPsĪn HSA is a savings account that lets you set aside pre-tax money to pay for qualified medical expenses such as deductibles, copayments, coinsurance, and other expenses.How to tell if your plan is HSA eligible.What is a health savings account (HSA)?.In a hurry? Jump to your favorite section below! So how do you know if your HDHP is HSA-qualified? In this article, we’ll go over the ins and outs of HSAs, including eligibility, contribution limits, and how they can work with a health reimbursement arrangement (HRA) to help supplement your HDHP even more.ĭownload our HRA and HSA compatibility guide One way is to offer a health savings account (HSA) alongside the HDHP.Īn HDHP combined with an HSA gives you traditional health insurance with triple tax advantages, which helps you save for future medical expenses and provides greater flexibility and customization over how you use your healthcare benefits. Employers offering a high deductible health plan (HDHP) have several ways to offset the higher out-of-pocket costs and make the benefit more meaningful for employees.
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