This blog was written by Abby Keele, Benefits Specialist at Helpside.
If your employer offers multiple health plan options, you will have to decide what kind of health plan will work best for you and your family. Two of the most common types of health plans are HSA (Health Savings Account) qualifying high deductible health plans and traditional health plans. These plans are very different from each other, which means one may be better suited to your situation. Here are the details you need to know about HSA qualifying and traditional health plans:
Traditional Health Plans
Traditional health plans typically have co-pays for general and specialist office visits, co-pays for prescriptions, and a deductible and co-insurance for in-patient and outpatient hospital services, maternity coverage, surgery and other large procedures. These types of plans provide the best benefits for in-network healthcare, but also provide some coverage for healthcare outside of your network. Though out-of-pocket costs for this type of plan are generally low, monthly premiums are typically higher than HSA qualifying high deductible health plans.
HSA Qualifying Plans
HSA qualifying plans are high deductible plans that must meet certain IRS requirements. High deductible plans have lower monthly premiums but require you to pay more up front before your insurance pays any claims. Typically, all expenses other than wellness including prescriptions, office visits and hospital services are covered after your deductible has been met for the year. This makes HSA qualifying plans a good idea for people who either do not use their health plan often, or those who will likely meet their deductible each year.
Another feature of HSA qualifying plans is a Health Savings Account (HSA), which is an investment account designed to help individuals pay medical bills using pre-tax money. HSAs work like flexible spending accounts, with a few distinct advantages. First, money put into an HSA rolls over year to year. Some accounts also allow users to earn interest in their HSA funds. Because of their significant tax advantage, HSAs are only available to individuals who participate in certain qualifying high deductible plans.
If you have the choice between traditional coverage and an HSA qualifying plan, consider your current health situation and expected health claims for the year before making a decision. It may be helpful to look back at a previous year of health insurance claims and think about how each type of plan would have covered them. If you have more questions about health plans or what would be best for your situation, contact Helpside at service@helpside.com.