Covered Benefits of HSA-Qualified Health Insurance

There is a common misperception that HSA-qualified policies are inferior to traditional insurance policies. This is generally not the case. Typically, the benefits covered by HSA-qualified plans are identical to traditional policies. The major difference is the amount of the deductible and the limit on out-of-pocket expenses.

Same insurance laws

HSA-qualified policies are subject to the same insurance laws and regulations as other policies (HMOs, PPOs, indemnity policies, etc.). This means that the same benefit mandates, premium regulations, and consumer protections prescribed by each state (and the federal government) apply to HSA-qualified policies. As with traditional policies, HSA-qualified policies must be approved for sale by your state insurance department.

An exception

The only exception to this is policies offered by companies (typically larger companies) that self-insure their employee health benefits. However, these policies are regulated by a federal law known as "ERISA" which allows companies to offer policies to their workers that provide the same benefits regardless of which state the employees work.

An important difference to remember

One important difference between traditional plans and HSA-qualified plans is that the deductible must apply to all covered benefits under an HSA-qualified plan, including the cost of prescription drugs. This means that an individual or family could meet their deductible solely through prescription drug expenses. If you take a lot of prescription medicines, you may pay more out of your own pocket when you pick up your prescription than the $15 or $20 copays you may be used to paying, but you may also hit your deductible faster and reach higher levels of insurance coverage more quickly (e.g., 80% or 100% coverage).

As with traditional policies, HSA-qualified policies may have different levels of covered benefits depending on whether they are provided by "in-network" or "out-of-network" physicians, hospitals, and other medical providers. The requirements for HSA-qualified plans regarding deductibles and out-of-pocket expenses described above apply only to covered benefits from "in-network" providers.