Health Savings Account (HSA) & an accompanying High Deductible Health Plan (HDHP) are the two major components of what is generally referred to as the HSA.
The HSA is the savings part and the HDHP is the insurance component.
A Health Savings Account is a savings account established exclusively to save money on a pre-tax basis that may be used to pay for qualified medical expenses on a tax-free basis.
An HSA account:–Is funded on a pre-tax basis.–Allows the funds to grow tax-free and roll over from year to year.–Is portable from one policy and employer to another.–Must be established and used in conjunction with a qualifying high deductible health plan.–Accumulates funds to pay for qualified medical expenses not paid through the high deductible health plan such as office visits, deductible, co-insurance and prescriptions.
Your HDHP is a preferred provider organization (PPO) based product:–A preferred provider organization (PPO) is a health plan that has contracts with a network of “preferred” providers from which you can choose. You do not need to select a PCP and you do not need referrals to see other providers in the network.
The high deductible health plan:–Does not have an office visit copayment. There are no co-payments for prescriptions unless the calendar year deductible has been satisfied.–Caps your maximum out of pocket satisfied by and deductible and the coinsurance (if any).–Will pay for annual routine physicals without co-payments or deductible.
If you receive your care from a doctor in the preferred network you will be responsible for the annual deductible and coinsurance for claims. If you access services from a physician or hospital that is not in the preferred network you are subject to paying more for these services.
Your prescriptions are subject to your calendar year deductible and are paid out of your tax favored HSA.
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