Health savings accounts (called HSA’s) have become more popular over the last few years as the cost of health insurance has continued to rise rapidly. HSA’s are essentially a bank account to be used for healthcare services. Only certain health insurance policies are compatible with them and you can only open an HSA if you are insured under a compatible plan.
What sets HSA-compatible plans apart from traditional/co-pay plans is that HSA plans require the insured(s) to pay for all services at the full negotiated cost until the deductible is met. After the deductible is met, most HSA plans will pay 100% of any other covered charges for the rest of the year. On all HSA plans, the insurance company will always pay 100% for covered benefits after the “out of pocket maximum” is met. Co-pay plans have a fixed price for services like doctor’s office visits and prescription drugs. Preventative care services are exempt from these requirements.
HSA plans have a single combined deductible for the whole family (whether 2 members, or 5, or any other number). Co-pay plans will usually have a deductible that applies to each individual person in the family with a maximum of two deductibles per family.
There are several major benefits to HSA-compatible plans:
1. All contributions, up to the maximum allowed per year ($3,050 for individuals and $6,150 for families, another $1000 for those over age 55), are 100% tax deductible as an “above the line” deduction even if you do not itemize your taxes. We are insurance agents, not accountants, so we always encourage you to speak with your CPA for specific tax advice.
2. HSA plans limit your TOTAL maximum out of pocket (MOOP) expense. Most co-pay plans consider office visits and prescriptions a separate benefit from your MOOP and must always be paid, even after you have paid the MOOP. Theoretically, you can incur thousands of dollars in prescription charges on a co-pay plan even after paying your MOOP. With HSA plans, there is always a specified limit on your maximum expense before the insurance company pays 100%
3. Lower premiums. Assuming all else is equal (i.e. deductible, co-insurance, etc), an HSA health insurance policy will be less expensive than a co-pay policy.
4. Funds in health savings accounts grow tax-free and are never taxed if withdrawn for medical care. HSA funds can also be used to pay for Medicare premiums, dental work, long term care insurance (subject to limitations). You can withdraw HSA funds at age 65 and pay income tax on the withdrawals, or continue using your HSA funds for medical care or the above items (among others) until the account is exhausted. HSA funds withdrawn before age 65 for non-healthcare purposes are subject to income taxes and a 20% penalty.
The following plans are some of the most comprehensive and lowest priced on the Virginia health insurance individual market:
Anthem Lumenos HSA Plus – Deductible choices of $1500, $3000, and $5000 for individuals or $3000, $6000, and $10,000 for families. Available in all areas of Virginia west of Route 123 in Northern VA.
CareFirst BluePreferred HSA PPO – Deductible choices of $1,200 or $2,700 for individuals and $2,400 or $5,400 for families. Available in areas of Virginia east of Route 123 in Northern VA.
CareFirst BlueChoice HSA HMO – Same as BluePreferred plan, but with an HMO-only network and includes maternity benefits as a standard policy benefit.
Humana Autograph Total Plus Rx – Deductible choices of $1500, $2500, $3500, or $5000 for individuals and $3000, $5000, $7000, or $10,000 for families. Available in all areas of Virginia.
United Health One HSA 100 and HSA 70 – Deductible choices of $1250, $2500, $3000, $3500, and $5000 for individuals or $2500, $5000, $6000, $7000, and $10,000 for families. Available in all areas of Virginia.
To get an instant quote for any of the above plans and apply online, just click the banner at the top or bottom of the page to get started. You can give us a call at 1-800-571-2980 if you have any questions from 9 AM to 7 PM or send us an e-mail at [email protected] 24 hours a day. We never charge you for our services as we are paid directly by the insurance companies and the cost of coverage is exactly the same whether you apply with us or directly to the insurance company. They cannot charge you a lower rate for direct sales.