HSA Insurance: What Makes an Insurance Plan HSA Compatible?

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I currently have an HSA compatible health insurance plan for my family. It’s great because it’s fairly inexpensive and it will cover us if anything major happens (except a baby, that is).  Plus, I get to start stashing cash into my health savings account (HSA). HSA insurance is the way to go for a lot of people, especially the self-employed individual to manage health care expenses.

The HSA itself is a simple savings account created by the government where you can store tax-sheltered cash to spend on health-related expenses. It’s great in that it’s not like a flexible spending account, which is “use it or lose it”. With an HSA, you can stash the cash away and then use it only when you need it. Think of the HSA as a way to self-insure the everyday costs associated with your health.

If you want individual health insurance that includes a health savings account (HSA), you need to make sure that your health insurance plan meets the federal requirements. Since the HSA is governed by the federal government, they get to decide which plans meet the mark. Here are the two major requirements to qualify as HSA insurance:

1. The sum of the annual out-of-pocket expenses required and the annual deductible should not exceed a certain threshold: $5,950 for individuals and $11,900 for the families.
2. The health insurance plan that you purchase needs to have an annual deductible of at least $2,400 for families and at least $1,200 for an individual.

*These numbers change for inflation every year.

To make it easy for you, most insurance providers in your State will designate which of their individual plans are HSA eligible. When I signed up through ehealthinsurance.com they had a little symbol by each of the HSA insurance eligible plans. Once you have the plan, you can go to a bank, credit union, or insurance company to get your actual HSA.

See the IRS HSA Publication 969 for more information.

photo by clevercupcakes

Related Posts:

• Going from Individual to Group Health Insurance
• Buying Health Insurance as a Self Employed Individual
• High-Deductible Health Insurance Plan Plus HSA

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