A high deductible health plan may work a little differently than other health insurance plans you've had in the past. A high deductible health plan or "HDHP" is designed to help keep premium costs low for you and your family.
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With a High Deductible Health Plan (HDHP), preventive services such as routine physicals, screenings and vaccinations are covered in full.* The deductible does not apply to preventive services; they are covered in full from day one.
For services other than preventive care, you are responsible for paying out of your pocket until you meet your deductible. The deductible amount will vary based on your plan, so make sure you know what that amount is.
Once you reach your deductible, you will pay a percentage of cost, called coinsurance. Coinsurance is your share of the costs of a covered health care service, calculated as a percent. You will have to pay a percentage of that service and the health insurance company will pay the rest.
To help you with your costs, there is an out-of-pocket maximum which is an annual limit on the amount of money that you would have to pay for health care services, not including your monthly premiums. Remember preventive care is covered in full and is not subject to the deductible.
* In accordance with the PPACA preventive care regulations, full coverage (no cost share) will be applied for those services meeting the requirements as outlined in Grade A and B Recommendations of the United States Preventive Services Task Force.
You have the option to set up a unique account called a Health Savings Account or HSA to help you cover the costs associated with a high deductible health plan.
What is an HSA?
An HSA is a tax-free funding account owned by you that helps you pay for qualified medical expenses such as lab fees, prescription drugs, contact lenses, chiropractor visits and more. The money you put into your HSA is not subject to federal income tax when you make the deposit. There are limits to how much you can contribute.
In 2016 the maximum is:
$3,350 for single coverage
$6,550 for family coverage
If you’re under 65 and you withdraw money from your HSA for non-qualified medical expenses, you will be taxed at your income tax rate plus have to pay a tax penalty.
To take advantage of the savings that a Health Savings Account can provide to you and your family, contact your financial institution.
Find answers to frequent HSA questions and definitions of HDHP terms.
Funds may be used for any reason, however only qualified medical expenses are tax-free. Non-qualified expenses are subject to income tax. If you use funds for non-qualified expenses before age 65, you will have to pay an additional penalty tax.
For calendar year taxpayers, the deadline for contributions is generally April 15 following the year for which the contributions are made. The maximum contribution may be made on the first day of the year in a lump sum.
When you go to the doctor’s office, let them know you are using a Health Savings Account. The doctor will bill Excellus BlueCross BlueShield. Once the bill has been processed, you and your doctor will get a letter that summarizes the costs associated with that visit. It will also show how much goes towards your deductible and how much you have to pay your doctor. Your doctor will send you a bill for the balance. You can use money from your Health Savings Account to pay that bill.
This is a fixed amount you pay each time you use a medical service, such as a doctor's office visit, prescription refill or a hospital stay. For example, if your prescription drug coverage includes a $20 copay, you pay $20 for each prescription and your insurance pays the balance.
Your share of the costs of a covered health care service, calculated as a percent Coinsurance is similar to a copay, but instead of a fixed dollar amount, it is a percentage of the total bill. For example, if a visit to your doctor’s office is $100 and you’ve met your deductible, your coinsurance payment of 20% would be $20. The health insurance company would pay the rest, or $80.