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Qualified High Deductible Plan for HSA

Posted: Fri Feb 14, 2020 2:18 pm
by SVariance1
I am having a difficult time finding out whether or not my health insurance plan is a "qualified high deductible plan" per the IRS guidelines. I have read parts of IRS publication 969 for HSAs but whether or not my heath insurance plan qualifies is still not clear to me. I have deductibles for each individual and for the family that are well over the IRS's minimum of $1,350 and $2,800 per year. Also, according to the IRS, there is a maximum out of pocket annual deductible plus other out of pocket expenses for an individual of $6,900 and family of $13,800. According to my original contract, my maximum out of pocket per person seems to be $5,000. I do not see a maximum out of pocket for a family.

The wait times to speak to someone at my insurance company are long and the wait times for an email response are longer. I have actually received conflicting information from my insurer. One person I spoke with said, my plan is not eligible while another person (via email), told me that my plan may be eligible but that I would have to contact a tax professional or the IRS to for a more specific answer. I called the IRS and they referred to publication 969.

Any thoughts?

Thank you

Re: Qualified High Deductible Plan for HSA

Posted: Fri Feb 14, 2020 2:53 pm
by niceguy7376
Is this health ins through an employer or on market place?
Does the name of the policy on your card mention "HSA"?

Re: Qualified High Deductible Plan for HSA

Posted: Fri Feb 14, 2020 3:08 pm
by sailaway
You did not receive conflicting information. You received one no and one I don't know.

If your plan has a per person OOP max, I don't see how it can be HSA eligible.

For what it is worth, my card says "qdhp," (qualified deductible health plan) not HSA on it.

Re: Qualified High Deductible Plan for HSA

Posted: Fri Feb 14, 2020 3:09 pm
by earlyout
Be careful not to confuse deductibles with out of pocket max. If, as you state, your oop max is 13,800 that is too high to qualify for an HSA.

"For 2019, the IRS defines a high deductible health plan as any plan with a deductible of at least $1,350 for an individual or $2,700 for a family. An HDHP’s total yearly out-of-pocket expenses (including deductibles, copayments, and coinsurance) can’t be more than $6,750 for an individual or $13,500 for a family. (This limit doesn't apply to out-of-network services.)"

Re: Qualified High Deductible Plan for HSA

Posted: Fri Feb 14, 2020 3:42 pm
by SVariance1
earlyout wrote: Fri Feb 14, 2020 3:09 pm Be careful not to confuse deductibles with out of pocket max. If, as you state, your oop max is 13,800 that is too high to qualify for an HSA.

"For 2019, the IRS defines a high deductible health plan as any plan with a deductible of at least $1,350 for an individual or $2,700 for a family. An HDHP’s total yearly out-of-pocket expenses (including deductibles, copayments, and coinsurance) can’t be more than $6,750 for an individual or $13,500 for a family. (This limit doesn't apply to out-of-network services.)"

I think $13,800 is for a family for 2019 while $13,500 is for 2018. I have a per person out of pocket max of $5,000 but I am not sure if an out of pocket max exists for the family. There are separate deductibles for individuals and for families, both of which much much higher than the IRS minimum

Re: Qualified High Deductible Plan for HSA

Posted: Fri Feb 14, 2020 3:46 pm
by SVariance1
niceguy7376 wrote: Fri Feb 14, 2020 2:53 pm Is this health ins through an employer or on market place?
Does the name of the policy on your card mention "HSA"?
I purchased the plan directly from the insurance company prior to ACA. I think it is what they call a grandfathered plan. There is no mention of HSA on my card but the card is old.

Re: Qualified High Deductible Plan for HSA

Posted: Fri Feb 14, 2020 5:51 pm
by Artful Dodger
I think you’ll need to get confirmation from the insurance company. They will have a record if it was filed as a qualified plan.

A basic tenet of HDHPs is lack of first dollar benefits. This means the deductible applies to all services before any payment is made. These plans do not have office visit, ER, or RX card copays unless they come into play after the deductible has been met. After ACA, plans were allowed to cover preventive services before meeting your deductible but since you have a grandfathered plan, this may not apply in your case.

Re: Qualified High Deductible Plan for HSA

Posted: Fri Feb 14, 2020 6:29 pm
by Nate79
Almost assuredly the answer is no.

Re: Qualified High Deductible Plan for HSA

Posted: Fri Feb 14, 2020 6:56 pm
by Spirit Rider
SVariance1 wrote: Fri Feb 14, 2020 2:18 pm I have deductibles for each individual and for the family that are well over the IRS's minimum of $1,350 and $2,800 per year.
As has already been pointed out. In order for an high deductible plan to be an HSA qualifying HDHP. There can be no non-preventative coverage before the plan type minimum deductible is met.

This means that in a family health insurance plan there can be no individual deductible < the HSA minimum family deductible (2020 = $2,800)
  • $3,000 individual deductible, $6,000 family deductible = HSA qualifying HDHP
  • $1,500 individual deductible, $3,000 family deductible = HSA disqualified high deductible plan

Re: Qualified High Deductible Plan for HSA

Posted: Fri Feb 14, 2020 9:38 pm
by LadyGeek
This thread is now in the Personal Finance (Not Investing) forum (HSA).

Re: Qualified High Deductible Plan for HSA

Posted: Fri Feb 14, 2020 10:21 pm
by earlyout
SVariance1 wrote: Fri Feb 14, 2020 3:42 pm
earlyout wrote: Fri Feb 14, 2020 3:09 pm Be careful not to confuse deductibles with out of pocket max. If, as you state, your oop max is 13,800 that is too high to qualify for an HSA.

"For 2019, the IRS defines a high deductible health plan as any plan with a deductible of at least $1,350 for an individual or $2,700 for a family. An HDHP’s total yearly out-of-pocket expenses (including deductibles, copayments, and coinsurance) can’t be more than $6,750 for an individual or $13,500 for a family. (This limit doesn't apply to out-of-network services.)"

I think $13,800 is for a family for 2019 while $13,500 is for 2018. I have a per person out of pocket max of $5,000 but I am not sure if an out of pocket max exists for the family. There are separate deductibles for individuals and for families, both of which much much higher than the IRS minimum
Sorry about the confusion above. The limits in the quote from healthcare.gov are for 2019. My comment was that if your family policy had an oop max of 13,800 it would not qualify for an HSA because it is above the 2019 limit.

Just for clarification:

2018 -- deductible limits 1350 for an individual policy, 2700 for a family policy, the oop max is 6650 individual, 13300 family
2019 -- deductible limits 1350 or 2700 (same as '18), the oop max is 6750 or 13500
2020 -- deductible limits 1400 or 2800, oop max 6900 or 13800

There are two type of policies -- individual or family and each policy type has it own set of limits.

Re: Qualified High Deductible Plan for HSA

Posted: Sat Feb 15, 2020 7:54 am
by SVariance1
Artful Dodger wrote: Fri Feb 14, 2020 5:51 pm I think you’ll need to get confirmation from the insurance company. They will have a record if it was filed as a qualified plan.

A basic tenet of HDHPs is lack of first dollar benefits. This means the deductible applies to all services before any payment is made. These plans do not have office visit, ER, or RX card copays unless they come into play after the deductible has been met. After ACA, plans were allowed to cover preventive services before meeting your deductible but since you have a grandfathered plan, this may not apply in your case.

After reading parts of publication 969 again, it seems that having preventative care will not necessarily make a plan ineligible but having a prescription benefit prior to a deductible being met would make the plan ineligible.

Re: Qualified High Deductible Plan for HSA

Posted: Sat Feb 15, 2020 8:05 am
by cas
SVariance1 wrote: Sat Feb 15, 2020 7:54 am
After reading parts of publication 969 again, it seems that having preventative care will not necessarily make a plan ineligible but having a prescription benefit prior to a deductible being met would make the plan ineligible.
Yes, that is true.

You may be interested in this blog post by boglehead's contributor tfb. It puts Publication 969 (plus maybe some IRS supplementary information, like IRS Notices) into plainer language in one place.

The Finance Buff, 2016, Not All High Deductible Plans Are HSA Eligible