Can You Have an Individual Deductible With a Family HSA Plan?

If you are in a position where you need to buy your own health insurance, you may be considering a high-deductible health plan with a health savings account (HSA). Typically, high-deductible plans have lower insurance premium costs, and money that you deposit into your health savings account is a tax deduction up to IRS limits. The thought of paying the entire deductible before insurance covers any expenses can be overwhelming, but some insurance plans are structured differently.

HSA-Qualified Deductible Limits

• Each year, the Internal Revenue Service determines the maximum deductible it will allow a health insurance policy to have and still qualify as an HSA-eligible plan. For 2011, the maximum deductible for an individual plan is $5,950, and $11,900 for a family policy. Although there are health insurance plans available with higher deductibles, they would not qualify as an HSA plan.

Meeting a Family Deductible

• In an HSA-qualified plan, more medical expenses apply toward the deductible than with a traditional health insurance plan. For example, costs for prescription medication and office visits to your doctor apply toward the deductible with HSA-qualified plans. If you have a family HSA-qualified plan, the qualified medical expenses for each family member collectively apply toward the deductible. For example, let's assume you have a family of four people and a $10,000 deductible. That means that your family's medical expenses would need to total $10,000 for everyone before any medical expenses were paid by the insurance company (except for preventive care specified in your policy and mandated by law).

Meeting the Individual/Family Deductible

• Some health insurance carriers structure their HSA plans a little differently. For these plans, the family deductible may still be $10,000, but it will also specify an individual deductible of $5,000. That means that if any one person in the family has $5,000 in medical expenses, his or her deductible for the year is satisfied, even if there are not $10,000 in deductible expenses for the family.

Considerations

• If you have a family member with significant medical expenses, you might want to consider putting them on an individual HSA-qualified plan with a lower deductible. The rest of your family could be combined onto a family HSA-qualified plan. Health insurance plans must be approved by the state insurance commissioner before they can be offered in your state. As a result, a plan that is structured with an individual/family deductible may not be available in your state. A licensed health insurance agent who specializes in HSA-qualified plans can help you find available plans in your state.