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Hsa Insurance Plans Question & Answers

2015 April 17
by Sarah Fields

James asks…

Is my current medical insurance eligible to be an HSA?

I currently have a high deductible insurance plan ($5000). Even though it is not designated as an HSA medical plan, can I still use it as one since it meets the IRS requirements of an HSA. I don’t want to switch plans if I don’t have to.

Sarah Fields answers:

If your plan is an HSA-qualified High Deductible Health Plan (HDHP) you should be able to open an HSA (the saving account). As far as I remember no other specific designation on the health plan is needed. The custodian/trustee bank will have you fill paperwork for our eligibility to open an HSA account.

Contact your plan administrator to see if they work with or can recommend a trustee/custodian for the HSA. Go to the link on the source info below if you need to dig out more info. The link will go to hsainsider.com’s trustee/cusodian list. Go to the main page if you need to find other info.

Laura asks…

Can a wealthy business owner create his own HSA account?

An owner of three businesses, each with consistantly healthy profits, would like to create his own HSA account outside of these businesses. He is eligible for and does participate in a company health insurance plan. Does this preclude him creating his own health savings account?

Sarah Fields answers:

Yes, as long as there is a high deductible insurance plan that goes with it

Linda asks…

Can anyone help me shop for health insurance?

I am looking for health insurance and I can’t decide between a regular insurance plan or a plan that includes health savings accounts. What is the difference between these two and which one is the best? I am on a tight budget.

Sarah Fields answers:

Which one is best depends upon your situation. Are you the type that runs to the doctor for every little sniffle or do you rarely go see the doctor. Are you generally healthy or do you have health concerns.

The simplified answer:

The idea of the HSA qualified plan is to also open up a separate savings account that works similar to an IRA with tax advantages (but you don’t have to). The plan usually has a higher deductible than a “traditional” co-pay plan and lower premium. You pay the negotiated discounted rate if you go to the doctor. This amount can be paid out of the HSA and will go toward the deductible. If you have a catastrophic illness or accident you pay the deductible then everything is covered 100% (if you get the right HSA plan). This plan is better for healthy people who seldom see a doctor except for preventive check ups.

If you go to the doctor 6 or more times per year you will want the “traditional” co-pay plan. The premium is higher but you just pay the co-pay at the doctor.

You’ll want to go visit a local independent agent to get more details. In my area the average doctor co-pay is $25, the average doctor fee with the HSA plan is $75. You can do the math (with the agents’ help) to decide which is best for you in your area.

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