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High Deductible Qualified Health Plan

If you are looking for a way to lower your health insurance premiums, consider a high deductible health plan, known in the industry as an HDHP. These plans tend to have much lower premiums than more traditional coverage. You can increase your savings even more by coupling the HDHP with a health savings account and taking advantage of the available tax deduction.

  1. Minimum Deductible

    • In order to qualify as a high deductible health plan, the coverage you choose must have a deductible of at least $1,200 for single coverage or $2,400 for family plan. These limits are as of 2011, and they are subject to change. If you get your health insurance through your employer, check with your benefits office to make sure your current plan qualifies. If you buy on the individual market your insurance broker can help you find a qualified HDHP.

    Out-of-Pocket Maximums

    • Plans that qualify as high deductible health plans must also meet certain criteria regarding total out-of-pocket costs. For 2011, in order to quality as an HDHP the plan must have out-of-pocket costs no higher than $5,950 for a single plan. For family coverage the total out-of-pocket costs can be as high as $11,900. Always check with the benefits office at your company, or with your insurance broker, to make sure your plan qualifies as an HDHP.

    Health Savings Accounts

    • One of the advantages of a high deductible health plan, other than the lower premiums, is the ability to couple that plan with a health savings account. You can use the health savings account to cover the cost of the deductible and to pay some of the costs of your medical care. You can also deduct the money you contribute to an HSA when you do your taxes, providing you with a double benefit. The contribution limits for HSAs are subject to change, but for 2011 you can contribute up to $3,050 to a single HSA and $6,150 to a family plan. If you are 55 or older you can contribute an extra $1,000 to either plan.

    Changing Rules

    • The rules governing health savings accounts and high deductible health plans are always subject to change, and it is important for anyone who owns one of these plans to be aware of these changes. Before you make your annual HSA contribution, always check the current contribution limits and make sure you do not exceed them. Going over the contribution limits, or contributing to an HSA when you do not have a qualified health plan in place, could subject you to penalties from the Internal Revenue Service.

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