High Deductible Health Plans are designed to be paired with a tax-advantaged Health Savings Account (HSA). An HSA can be used to pay medical costs funded by contributions from you or your employer. You can set up an HSA if you meet the following qualifications:
- Not covered by any other health plan that is not an HDHP (with exceptions for plans providing certain limited types of coverage such as accident or specific disease policies);
- Not entitled to benefits under Medicare; and
- May not be claimed as a dependent on another person’s tax return.
How to Use Your HSA
Once you set up an HSA, you may contribute up to a specified pretax amount. The money in the HSA can be used to pay for medical services, prescription drugs, and rolls over from year to year. This is your money to use as you wish. But, if this money is not used for qualified medical costs, it will be subject to income tax plus a 10 percent penalty before the age of 65. After age 65, this money is treated as retirement income.
Administration of HSAs
While SelectHealth provides the insurance piece of the health benefit plan, we do not manage the HSAs. Instead, we have partnered with HealthEquity. However, you may choose to work with any HSA vendor.
For more information, visit HealthEquity.