This is a plan that has a higher annual deductible than typical health plans, and has a maximum annual limit on the total of the annual deductible and the out-of-pocket medical expenses you must pay, including co-payments and other amounts. The high deductible health plan can cover preventive care health services, subject to the annual limit on the deductible and out-of-pocket expenses.
For purposes of qualifying for an HSA, the annual deductible has to be more than a certain minimum amount, and there are maximum limits defined for the amount of the annual deductible plus out-of-pocket expenses. These limits may change periodically and are published by the Internal Revenue Service (IRS). They can be found in IRS Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans.
The limit established as the maximum annual amount for the deductible and out-of-pocket expenses is for in-network services, if the plan has a network of health care providers. Out-of-network services would not be included in the maximum annual amount allowable. That is, if your deductible and out-of-pocket expenses are under the maximum amount defined, you could still qualify for an HSA, even if your expenses for out-of-network services put you over the limit.
Other Health Coverage You Can Have, and Still Qualify for an HSA
Health coverage plans you can have, and still qualify for an HSA, include workers’ compensation insurance, insurance for a specific illness or disease, insurance that provides a fixed amount per day for hospitalization, and other coverage for accidents, disability, dental care, vision care, or long-term care. You can have a prescription drug plan, either as part of your high deductible plan or as a rider or separate policy and still qualify for an HSA, provided you do not receive benefits until the annual deductible has been met.
Coordination of HSAs with Other Health Plans
Generally, if you are covered by a high deductible plan and also a Health Flexible Spending Arrangement (FSA) or a Health Reimbursement Arrangement (HRA), you cannot make contributions to a Health Savings Account (HSA). But there are certain cases in which an employee can make contributions to an HSA while being covered by a high deductible plan and one of the following:
Limited purpose FSAs or HRAs that only cover the items indicated under other health coverage above.
An HRA that you suspended. Before the HRA coverage period begins, you can elect to suspend it. During this suspension period, the HRA does not pay or reimburse you for expenses except for preventive expenses and others indicated under other health coverage above. During the period the HRA is suspended, you can make contributions to an HSA. Once the suspension period ends, you can no longer make contributions to an HSA.
FSAs or HRAs that pay for expenses only after the minimum annual deductible has been met. This does not have to be the same deductible that applies for the high deductible plan.