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

A High Deductible Health Plan (HDHP) with a Health Savings Account (HSA) or a Health Reimbursement Arrangement (HRA) provides traditional medical coverage and a tax free way to help you build savings for future medical expenses. The HDHP/HSA or HRA gives you greater flexibility and discretion over how you use your health care benefits.

The HDHP features higher annual deductibles (a minimum of $1,050 for Self and $2,100 for Self and Family coverage) than other traditional health plans. The maximum amount out-of-pocket limits for HDHPs participating in the FEHB Program in 2005 is $5000 for self and $10,000 for Self and Family enrollment. Depending on the HDHP you choose, you may have the choice of using in-network and out-of-network providers. Using in-network providers will save you money. With the exception of preventive care, you must meet the annual deductible before the plan pays benefits. Preventive care services are generally paid as first dollar coverage or after a small deductible, or copayment. A maximum dollar amount (up to $300, for instance) may apply.

When you enroll in an HDHP, the health plan determines if you are eligible for a Health Savings Account (HSA) or a Health Reimbursement Arrangement (HRA). If you are Medicare enrolled, you are not eligible for an HSA. Each month, the plan automatically credits a portion of the health plan premium into your HSA or HRA, based on your eligibility as of the first day of the month. You can pay your deductible with funds from your HSA or HRA. If you have an HSA, you can also choose to pay your deductible out-of-pocket, allowing your savings account to grow.

U. S. Department of Treasury on HSAs www.treas.gov/offices/public-affairs/hsa/ 

HSAs frequently asked questions www.treas.gov/offices/public-affairs/hsa/faq1.shtml 

HSA basics www.treas.gov/offices/public-affairs/hsa/pdf/hsa_tri-fold_brochure.pdf 

All about HSAs www.treas.gov/offices/public-affairs/hsa/pdf/hsa-basics.pdf

Actual HSA law www.treas.gov/offices/public-affairs/hsa/pdf/pl108-173.pdf 

For a comparison of plans go to www.opm.gov/hsa/chart.asp