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What is the Difference Between an Out-of-Pocket Expense and Deductible?

Lively · October 30, 2018 · 3 min read


Healthcare costs represent over 10% of the average American’s yearly income. These costs have a significant impact on your savings and lifestyle. Understanding your financial exposure (aka how much you can expect to pay), can help you plan (and save) for next year. Let us show you the two most common health care costs – out-of-pocket-expenses and deductibles.

Understanding these costs might allow you to save tax-free dollars for health costs. More on that below.

What are Health Insurance Deductibles?

Deductibles are the amount you must pay for your medical care before your insurance starts to cover it.  Some services like preventative visits are 100% covered before you reach your deductible, so it’s important to read the plans you’re considering to see if that’s the case.

What are Out-of-Pocket Costs?

These are all costs you have to pay for your healthcare, outside of premiums.  These can include your co-pays, coinsurance, and deductibles. It also includes any medical service you receive that isn’t covered by your insurance.

You need to understand your out-of-pocket maximum. This helps frame the total financial liability of your yearly health insurance costs.

If you need any more help, you can review our health insurance basics to better prepare for open enrollment.

Understanding your out-of-pocket costs and deductible costs are important for two keys reasons:

  1. Combined, your out-of-pocket costs and deductible costs showcase your total maximum costs per year for your insurance. In a worst case scenario, this should help you understand how much you would be required to pay. The only caveat is any expense or procedure that is not covered by insurance.

  2. They also determine your HSA eligibility. You must satisfy a minimum deductible and maximum out-of-pocket requirements to contribute to an HSA (health savings account). In 2019, HSA-eligible plans that qualify must have minimum deductibles of $1,350 for individuals and $2,700 for families. Qualifying plans must have maximum out-of-pocket amounts of less than $6,750 for individuals and $13,500 for families. You can read all about HSA-eligibility here. HSAs provide the only dedicate long-term health savings. They also create 100% tax-free health savings, investing, and spending.

Now that you have your healthcare costs covered, what’s next? Getting ready for open enrollment takes time. We wanted to help you save time along the way. See our open enrollment guide below to get started.

Open Enrollment FAQs



Lively is the modern HSA experience built for—and by—those seeking stability in the ever-shifting healthcare landscape. By harnessing modern innovation and deep industry expertise, Lively is committed to bridging today’s savings with tomorrow’s unknowns. Unlike traditional institutions hindered by bureaucracy, Lively’s commitment extends beyond initial set up to providing dedicated, ongoing support and education for every step. So each HSA can reach its maximum potential with minimal headache.

piggy bank on pink background


2024 and 2025 HSA Maximum Contribution Limits

Lively · May 9, 2024 · 3 min read

On May 9, 2024 the Internal Revenue Service announced the HSA contribution limits for 2025. For 2025 HSA-eligible account holders are allowed to contribute: $4,300 for individual coverage and $8,500 for family coverage. If you are 55 years or older, you’re still eligible to contribute an extra $1,000 catch-up contribution.

comparing hsa versus fsa


What is the Difference Between a Flexible Spending Account and a Health Savings Account?

Lauren Hargrave · February 9, 2024 · 12 min read

A Health Savings Account (HSA) and Healthcare Flexible Spending Account (FSA) provide up to 30% savings on out-of-pocket healthcare expenses. That’s good news. Except you can’t contribute to an HSA and Healthcare FSA at the same time. So what if your employer offers both benefits? How do you choose which account type is best for you? Let’s explore the advantages of each to help you decide which wins in HSA vs FSA.

Benefits of HSA employer matching

Health Savings Accounts

Ways Health Savings Account Matching Benefits Employers

Lauren Hargrave · October 13, 2023 · 7 min read

Employers need employees to adopt and engage with their benefits and one way to encourage employees to adopt and contribute to (i.e. engage with) an HSA, is for employers to match employees’ contributions.

Disclaimer: the content presented in this article are for informational purposes only, and is not, and must not be considered tax, investment, legal, accounting or financial planning advice, nor a recommendation as to a specific course of action. Investors should consult all available information, including fund prospectuses, and consult with appropriate tax, investment, accounting, legal, and accounting professionals, as appropriate, before making any investment or utilizing any financial planning strategy.



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