How your HSA works
Combine a qualified high-deductible health plan with a health savings account to save on premiums and take advantage of all HSAs have to offer. Explore the information below to learn more about the rules and regulations behind this attractive partnership.
High-deductible health plan
According to the IRS, high deductible health plans (or HDHPs):
- Must meet a minimum deductible set by the IRS each year
- Must limit out-of-pocket expenses
- Can use any plan design: HMO, POS, PPO or traditional indemnity plan
- Require a member to meet the deductible before the health plan benefits apply—all covered medical and prescription costs count toward the deductible
- Are allowed to cover preventive care services at no cost before the deductible is met (all PriorityHSA plans provide 100% coverage before deductible for preventive care)
- Can be fully funded or self-funded
- Must cover all qualified medical and prescription drug services in full for the rest of the year once the member meets the out-of-pocket maximum. Covered standard services such as physician services, hospital visits, preventive care and prescription drugs will count towards the out-of-pocket maximum.
Health savings accounts
HSAs are flexible, tax-free, savings accounts that:
- Work with HDHPs to help cover the cost of care - including deductibles and coinsurance
- Feature a triple tax advantage—tax-free contributions, tax-free withdrawals for qualified medical expenses, and tax-free growth
- Allow employer, employee, and even family and friends to make contributions
- Roll over each year and earn interest
- Can be invested in low-cost mutual funds to increase potential earnings and can even be a powerful part of a retirement strategy
Know your limits
Learn what the government allows you to contribute to your HSA annually and what your maximum expenses will be.
We wrote the book on HSAs