How to Know if Your Health Insurance Qualifies as a High-Deductible Health Plan

Whether you can contribute to a Health Savings Account (“HSA”) hinges on the type of health insurance plan you have. You may already be aware that you are required to be enrolled in a High-Deductible Health Plan (“HDHP”), but what does that actually mean?

After all, with the cost of health insurance going nowhere but up, every plan seems expensive.

Common Health Insurance Plans

Let’s start with the common types of plans.

Health Maintenance Organization (“HMO”) – with an HMO plan, your primary care physician (“PCP”) is typically the first stop for health needs, with referrals needed in order to see specialists. They typically come with lower monthly premiums, and benefit from lower out-of-pocket costs when receiving care that is “in-network”.

HSA eligible? Possibly, but not commonly (see below breakdown for IRS requirements).

Preferred Provider Organization (“PPO”) – there is more user flexibility with a PPO as there is no PCP referral required. Out-of-network care is available, although it is more expensive. They carry higher premiums, but the range of available providers is higher.

HSA eligible? Again, typically no unless they are clearly labeled as an HDHP.

Exclusive Provider Organization (“EPO”) – similar in nature to a PPO, but with no out-of-network coverage except in emergency situations. They do carry lower premiums as a result.

HSA eligible? Only if it meets the IRS HDHP criteria.

Point of Service (“POS”) – a hybrid of HMO and PPO, you get to choose a PCP, but when you go out-of-network it comes at a higher cost. Premiums come somewhere in the middle.

HSA eligible? Only if the plan was designed as an HDHP.

High-Deductible Health Plan (“HDHP”) – carry lower premiums, but you pay more out-of-pocket before insurance starts to chip in.

They can be an HMO, PPO, EPO, or POS plan, but at the end of the day, the HDHP designation is about cost structure and not provider type.

So, if your plan isn’t clearly labeled as an HDHP and your employer doesn’t automatically pair it with an HSA account, here are the easy ways to tell if it is:

Requirements for Being an HDHP

Minimum deductible threshold

Individual coverage: A deductible of at least $1,650.

Family coverage: A deductible of at least $3,300.

Maximum Out-of-Pocket (includes deductibles, copays, and coinsurance)

Individual coverage: No more than $8,300.

Family coverage: No more than $16,600.

No First-Dollar Coverage

The plan cannot cover most services (like doctor visits, prescriptions) before the deductible is met.

Exceptions: Preventive services (like annual checkups, vaccines) are allowed.

Summary

Most employees are offered a PPO or HMO plan. If it’s not clearly labeled as an HDHP, look at the deductible amount and compare it to the IRS rules. If the deductible amount is below the thresholds I listed above ($1,650 for self-coverage and $3,300 for family), it does not qualify for an HSA account.

If your deductible amount is below the threshold, (1) check the out-of-pocket maximum figures and (2) confirm that there is no early coverage except for preventive care.