Health Savings Accounts Part 3 - High Deductible Health Plan (HDHP)
This is the third article in a four-part series on Health Savings Accounts.
The High Deductible Health Plan (HDHP) features higher annual deductibles than other traditional health plans. Federal law requires that the health insurance deductible be at least:
- $1,100* for Self-only coverage
- $2,200* for Family coverage
Additionally, there are maximum out-of-pocket expenses under the HDHP. This includes deductibles, co-pays, and co-insurance expenses. These cannot exceed:
- $5,500* for Self-only coverage
- $11,000* for Family coverage
Depending on the HDHP plan selected, you may have the choice of using in-network and out-of-network providers. Using in-network providers will save money. With the exception of preventive care, the annual deductible must be met before the plan pays benefits. Preventive care services are generally paid as first dollar coverage or after a small deductible, or co-payment. A maximum dollar amount (up to $300, for instance) may apply.
Enrollment in an HDHP determines eligibility for a Health Savings Account (HSA). If enrolled in Medicare, individuals are not eligible for an HSA. Each month, the plan can automatically credit a portion of the health plan premium into the HSA, based on eligibility as of the first day of the month. Deductibles can also be paid with funds from the HSA. With an HSA, deductibles can also be paid out-of-pocket, allowing the savings account to grow.
HDHPs are widely available and becoming increasingly popular. Most insurance companies that sell health coverage offer HDHP policies. From 2004 to 2007, there was a seven-fold increase of individuals covered by an HDHP (3.2 million in 2007).
In our next newsletter, we will discuss contributions and withdrawals from the Health Savings Account (HSA).
* 2007 amounts - these are adjusted annually for inflation.
http://www.groupbenefitsinsurance.com/
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