High Deductible Health Plans (HDHP) and Health Savings Accounts (HSA)

A combination that can help you save money on health expenses in a tax-efficient way
tl;drHigh Deductible Health Plans are a type of plan with a high deductible and a lower premium. Health Savings Accounts are accounts that allow you to save tax-free money for health expenses. HSAs are typically paired with HDHPs, but make sure that your plan is labeled and that you qualify

What is a High Deductible Health Plan?

A High Deductible Health Plan (HDHP) is an insurance plan with a higher deductible and a lower premium. In these plans, you often pay less monthly but must pay more before your insurance starts to help out.

What is a Health Savings Account?

HDHPs are often coupled with a Health Savings Account (HSA). HSAs are medical accounts where you can save money for medical expenses without the money being subject to federal income tax.

Combining your HSA and HDHP can be beneficial as you get to save money in your HSA tax-free, then you can use that money to help pay the higher deductible of your HDHP if and when you have medical expenses.

This is a popular option, but not every HDHP also offers an HSA.

Does my HDHP offer an HSA? Do I qualify?

When shopping for your HDHP on either the federal or your state marketplace, make sure your chosen HDHP plan is labeled as HSA-qualified.

Picking an HSA-qualified plan is not the only requirement to qualify for a Health Savings Account. There are two more limitations:

  • You cannot be listed as a dependent on someone's tax returns
  • You cannot be a part of a Medicare or Tricare program