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High Deductible Health Plans (HDHP)
Since Sept. 1, 2004, small-employer group coverage providers have been required to offer at least one HDHP that meets federal requirements of a health savings account (HSA) or health reimbursement arrangement (HRA—see next section) in addition to the standard and basic offerings.
These tax-advantaged accounts will be used to pay for qualified medical expenses as defined by the IRS.
The Department of Financial Services does not have authority over HSAs or HRAs. However, the Office of Insurance Regulation does have the authority to review and approve HDHP insurance contracts.
A listing of small-employer group coverage providers who offer approved HDHPs is available on the Division of Consumer Services Web site at http://servicepoint.fldfs.com
What Are HSAs and HRAs, and Who Can Have Them?
What is an HRA?
An HRA (health reimbursement arrangement) is an employer-funded account that reimburses employees for qualified medical care expenses, typically combined with a high-deductible health plan.
What is an HSA?
An HSA (health savings account) is a tax-exempt trust or custodial account established to pay qualified medical expenses of the account beneficiary who, for the months for which contributions are made to an HSA, is covered under a high-deductible health plan.
Who is eligible to establish an HSA?
An “eligible individual” means, with respect to any month, any individual who:
- is covered under an HDHP on the first day of such month;
- is not also covered by any other health plan that is not an HDHP with certain exceptions for plans providing certain limited types of coverage;
- is not entitled to benefits under Medicare (generally, has not yet reached age 65); and
- may not be claimed as a dependent on another person’s tax return.
What is a “high-deductible health plan” (HDHP)?
An HDHP is an insurance policy that satisfies certain federally imposed annual deductible and out-of-pocket expense requirements.
Self-Only Coverage:
-
annual deductibles of at least $1,000
- annual out-of-pocket expenses not exceeding $5,000
Family Coverage:
- annual deductibles of at least $2,000
- annual out-of-pocket expenses not exceeding $10,000
Additional HDHP Attributes Include:
- In the case of family coverage, there is only one deductible. It does not matter which family member incurs the expenses to meet the deductible.
- Amounts are indexed for inflation.
- A plan does not fail to qualify as an HDHP merely because it does not have a deductible (or has a small deductible) for preventive care (i.e., annual physicals; obesity weight loss programs; screening services such as mammograms; tobacco cessation programs; child and adult immunizations; and routine prenatal
and well-child care).
Please note: Out-of-network copays don’t count toward out-of-pocket maximums.
What other kinds of health coverage may an individual maintain without losing eligibility for an HSA?
An individual does not fail to be eligible for an HSA merely because, in addition to an HDHP, the individual has coverage for any benefit provided by “permitted insurance.”
Having additional insurance policies such as:
-
accident,
- disability,
- specific injury (i.e. a cancer policy),
- dental care,
- vision care, or
- long-term care
will not affect your HSA. |
