Limits on Out-of-Pocket Expenses for HSA-Qualified Health Policies
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Limits on Out-of-Pocket Expenses for HSA-Qualified Health Policies
"HSA-qualified" policies must also limit annual out-of-pocket expenses paid by you or your family for covered benefits under the plan. After you or your family reaches this out-of-pocket limit, the plan must pay 100% of the cost of benefits covered under the plan ("in network" benefits only) for the remainder of the plan year.
Things To Know
- Make sure your policy has a limit on out-of-pocket expenses.
- The out-of-pocket limit you choose will impact your premium.
The limits
For 2025, the out-of-pocket limit cannot be any higher than $8,300 for individuals with self-only coverage or $16,600 for individuals with family coverage. Out-of-pocket limits can be as low as $1,650 for self-only coverage or $3,300 for family coverage beginning in 2025. If your high deductible policy has an out-of-pocket limit above or below these amounts, it is not an HSA-qualified policy.
NOTE: The amounts are adjusted annually for inflation and may increase from one year to the next.
It is possible for your policy’s out-of-pocket limit to be as low as your policy deductible, in which case the plan pays 100% of covered benefits after your deductible is met. Other policies may charge coinsurance (e.g., 20%) for covered benefits received after the deductible is met, up to a higher limit on total out-of-pocket expenses. Under HSA-qualified policies, the deductible, copays, and coinsurance amounts paid under the plan must count towards meeting the out-of-pocket limit on expenses.
Buyer’s Guide
Make sure your policy has a limit on out-of-pocket expenses that meets the requirements. The out-of-pocket limits for HSA-qualified plans can offer two significant benefits to you and your family when compared to traditional policies, especially if you have high medical expenses. First, some traditional policies do not have a limit on out-of-pocket expenses, leaving individuals and families exposed to unlimited and unpredictable expenses each year. Second, the deductible, copays, and coinsurance amounts paid under an HSA-qualified plan must count towards meeting the out-of-pocket limit on expenses. Under some traditional policies, the deductible and copays do not count towards meeting the out-of-pocket limit.
The level of out-of-pocket limit you choose will impact your premium. Some policies offer out-of-pocket limits as low as the deductible, meaning after you have met your deductible, the plan pays 100% of covered benefits. However, policies with higher limits may have lower premiums. Over time, you may accumulate enough funds in your HSA to lessen the impact of higher out-of-pocket limits. In addition, individuals age 55 or older can make additional contributions to their HSA accounts each year, which may help you accept policies with higher out-of-pocket limits.