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The real cost of being hospitalized with Covid-19 ranges from $38,000 to almost $1 million.

hand in a surgical glove holds the hand of a patient

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Lively can simplify your understanding of COVID-19. Here is what you need to know about COVID-19, healthcare, benefits, retirement, and of course HSAs.

COVID-19

Healthcare

Learn how your HSA can help you with healthcare expenses and other savings tips in his collection of healthcare articles 

Healthcare Articles

Having a baby is a momentous occasion. Some parents are surprised by any higher hospital bill.

The Cost of Childbirth﻿

Series: Common Healthcare Costs

Lively can simplify your understanding of your common healthcare costs. Here is what you need to know about common healthcare costs as they relate to healthcare, benefits, retirement, and of course HSAs.

Common Healthcare Costs

Lauren Hargrave is a writer from San Francisco who focuses on technology, finance and wellness. She follows comedians like most people follow bands and believes an outdoor sweat session can cure almost any bad mood. She’s also been writing her first novel for so long, her mom doesn’t ask about it anymore.

Lauren Hargrave

Average cost of hospital care for COVID-19

Lively can simplify your understanding of healthcare benefits. Here is what you need to know about healthcare benefits and of course HSAs.

Healthcare Benefits

Health Insurance

Lively can simplify your understanding of health insurance. Here is what you need to know about health insurance, healthcare, benefits, retirement, and of course HSAs.

Personal Finance

Lively can simplify your understanding of personal finance. Here is what you need to know about personal finance, healthcare, benefits, retirement, and of course HSAs.

According to Healthcare Bluebook, total hip replacement surgery can cost you anywhere between $23,203 and over $74,000.

How Much Does a Hip Replacement Cost?

The cost of breast cancer varies widely so it’s best to work with your doctor to ensure you’re getting effective treatment that’s also affordable.

The Cost of Breast Cancer

Financial Health

Lively can simplify your understanding of financial health. Here is what you need to know about financial health, healthcare, benefits, retirement, and of course HSAs.

Financial Health Articles

Lively can simplify your understanding of benefits. Here is what you need to know about healthcare, benefits, retirement, and of course HSAs.

Benefits articles

Benefits

Cardiac bypass is the most common type of heart surgery performed on adults in the US. The average cost in the US in 2018 was $123,000. Learn the details here.

What will you pay for coronary artery surgery?

More than 720,000 Americans have knee replacements each year. These costs are also becoming more common. With that in mind, how much will it cost you?

The Cost of Knee Replacement Surgery

__More Articles in This Series:__

- [The Cost of Breast Cancer](https://livelyme.com/the-cost-of-breast-cancer/)
- [The Cost of Knee Replacement Surgery](https://livelyme.com/the-cost-of-knee-replacement-surgery/)
- [The Cost of Hip Replacement Surgery](https://livelyme.com/hip-replacement-cost/) 
- [The Cost of Childbirth](https://livelyme.com/the-cost-of-childbirth)
- [The Cost of Heart Bypass Surgery](https://livelyme.com/blog/the-costs-of-bypass-surgery/)

We’re well into the marathon known as the Covid-19 pandemic, with the goal to survive, both clinically and financially. When it first became clear that Covid-19 was rapidly making its way through the U.S. population, federal, and state governments acted quickly to encourage everyone with the virus to get the treatment they needed.  

The Coronavirus Aid, Relief, and Economic Security (CARES) Act of 2020 installed these provisions for treatment-related financial relief:

- [Free Covid-19 testing](https://livelyme.com/blog/how-to-get-free-covid-testing/)
- Lowering the out-of-pocket costs related to treatment of Covid-19 for insured patients (most Medicare plans covered treatment at 100%)

In addition, some states like California offered cost-sharing waivers for treatment of Covid-19, that included testing, vaccines, clinical visits, emergency services, and hospital care. But as infections have decreased, and vaccination rates risen, insurers and state governments are rolling back their cost-sharing waivers. That means if you’re one of the 20% of people who contract Covid-19 that require hospitalization, and you have insurance, you will most likely be responsible for some out-of-pocket costs that are outlined in your insurance policy. If you don’t have insurance, you’ll be responsible for paying the entire cost of your care, which could be significant.

## How Much it Costs to be Hospitalized with Covid-19 

The total cost for being hospitalized with Covid-19 ranges between $38,221 and almost $1 million according to a brief by <a href="https://www.fairhealth.org/article/fair-health-releases-brief-on-covid-19" target="_blank">FAIR Health</a>. Like any medical issue, the range in Covid-19 hospitalization depends on many factors including:
- The geographic location in which you’re receiving treatment.
- The hospital at which you’re receiving treatment.
- The severity of your case.
- How long you stay in the hospital: Most people who survive Covid-19 spend between 1 and 5 days in the hospital, but the median number of days for hospital treatment is 9. That means there is a small group of people staying in the hospital for a very long time.
- Your age. The average age for hospitalization is 54.
- Whether or not you have any comorbidities like diabetes. People with comorbidities are twice as likely to require hospitalization.
- Whether or not you have insurance. Insurance companies can negotiate with providers to get lower rates. Individuals typically don’t have the same bargaining power so they end up paying more for the same care.

To get a better understanding of how much it’s likely to cost you if you’re hospitalized with the disease, we’ve broken the costs into tiers based on age with breakouts for other extenuating factors based on <a href="https://www.fairhealth.org/article/fair-health-releases-brief-on-covid-19" target="_blank">data shared by FAIR Health</a>.

## Total COVID-19 Cost for People aged 20 years or less
- Average cost of COVID-19 Hospitalization(1-5 days): $68,261
- Average cost of COVID-19 Hospitalization (6-10 days): $155,619
- Average cost of COVID-19 Hospitalization (11-15 days): $324,285
- Average cost of COVID-19 Hospitalization (15+ days): Data not available

## Total COVID-19 Cost for People Aged Between 21 and 40 years
- Average cost of COVID-19 Hospitalization (1-5 days): $51,389
- Average cost of COVID-19 Hospitalization (6-10 days): Data not available
- Average cost of COVID-19 Hospitalization (11-15 days): Data not available
- Average cost of COVID-19 Hospitalization (15+ days): $980,821

## Total COVID-19 Cost for People Aged Between 41 and 60 years
- Average cost of COVID-19 Hospitalization (1-5 days): $78,569
- Average cost of COVID-19 Hospitalization (6-10 days): Data not available
- Average cost of COVID-19 Hospitalization (11-15 days): Data not available
- Average cost of COVID-19 Hospitalization (15+ days): Data not available

## Total COVID-19 Cost for People Aged Over 60 years
- Average cost of COVID-19 Hospitalization (1-5 days): $77,323
- Average cost of COVID-19 Hospitalization (6-10 days): $89,874
- Average cost of COVID-19 Hospitalization (11-15 days): $152,388
- Average cost of COVID-19 Hospitalization (15+ days): $460,989

Please note that these are the average costs for all patients in this age group who were hospitalized for the indicated number of days. In this section we’ll parse out how some extenuating factors affect how much you’ll pay for your Covid-19 related hospital stay:

- __Ventilators.__ The total cost of hospitalization for people who did not need a ventilator was $12,692. People who needed a ventilator for 96 hours or less paid on average $34,223. People who needed a ventilator for more than 96 hours paid an average of $88,114.
- __Comorbidities.__ People who suffered from comorbidities when they contracted Covid-19 paid roughly 30% more for their hospital stay than those who didn’t suffer comorbidities.
- __ICU stay.__ Patients who required a stay in the ICU during their hospitalization for Covid-19 paid 45 times more than people who did not require a stay in the ICU.

Now compare these numbers to the average cost for treating Covid-19 in an outpatient setting (i.e. at home, with visits to, and treatment regime prescribed by, the family doctor) which is between $500 and $1,000.

## What Those COVID-19 Costs Entail

Roughly 90% of your hospital bill will consist of hospital fees. The rest will be the physicians’ fees. Like everything else, the physician’s fees vary widely depending on the type of care you need. For instance, if you need a ventilator for less than 96 hours, your physicians’ fees will be $3,000 on average. But if you need the ventilator for more than 96 hours, those fees will average $9,000.

## How to prevent going to the hospital

The single best way to prevent a Covid-19 related hospital stay is to not get Covid-19. Prevention methods include:
- Get vaccinated
- Wear a mask
- Socially distance
-
If you have a comorbidity, see a doctor about getting your condition under control. If you do contract Covid-19, see a doctor and follow their recommended treatment regimens. 

Even if you have health insurance, your co-insurance obligation for a Covid-19 related hospital stay could be staggering. If you have an HSA or FSA, you can [use those deposits to pay for your out-of-pocket costs](https://livelyme.com/guides/hsa-guide/), but perhaps the cheapest way to pay for a Covid-19 hospitalization is to avoid it altogether. Take care of yourself.


The Real Cost of Hospitalization with Covid-19

Every year, roughly 330,000 hips are replaced in the U.S. and most of those people will get completely different medical bills. Why? Because the cost of medical care depends on where you’re receiving your care, the provider you choose, the insurance you have and the nuances to your particular surgery.&nbsp; For instance, the longer your surgery is, the more you have to pay the anesthesiologist.&nbsp; Even providers within the same network can charge vastly different prices for the exact same services.

Given this information, how are you supposed to know what you should pay?  The answer is Healthcare Bluebook which calculates the “Fair Price” for medical services and surgeries based on the actual amounts health plans pay in claims.

## The average price of a hip replacement

According to [Healthcare Bluebook](https://www.healthcarebluebook.com/), hip replacement surgery can cost you anywhere between $23,203 and over $74,000. Anecdotally, I know a woman whose hip replacement surgery bill came to $102,000, so the range is wide.

Healthcare Bluebook estimates the fair price for hip replacement surgery to be $25,779 Here’s how that cost breaks down:
__Hospital __
- Implant Cost: $8,000 (Check with your provider to see which implant they plan to use as that can affect cost.)
- 3 Days Admission: $5,400 (Estimated at $1,800/day.)
- Other Hospital Charges: $8,515 (These can vary.)
- Total: $21,915

__Physician Services__
For procedure and standard post-op care: $2,679 
Anesthesia $1,185 (Price for an average surgery time of 2.5 hours. Actual price depends on surgery time.)

__Grand Total:__ $25,779

Keep in mind these costs only reflect a fair estimate for the cost of the actual surgery and don’t include physical therapy or any medication you might need before or after surgery.

## How much will you actually have to pay?

Your out-of-pocket cost for hip replacement surgery will depend on your insurance. Remember that woman whose bill for surgery was $102,000?&nbsp; She was only responsible for $520 of that because she’d already met her deductible and had otherwise great health insurance.

If you don’t have health insurance, you’ll be responsible for the entire cost. If you do have health insurance, it will depend on your deductible, co-insurance and max out-of-pocket cost.

According to Healthcare.gov, typical healthcare coverage breaks down as follows:
- Deductible: $1,300
- Co-insurance: 20%
- Max Out-of-Pocket Cost: $4,400

If this was your plan, and your hip replacement was the first medical procedure you had in that calendar year, you would be responsible for $4,400 of that bill.&nbsp; If you’d already reached your deductible, then you would be responsible for 20% of the cost up to $3,100 ($4,400 max out-of-pocket minus the $1,300 deductible you’ve already paid).

To figure out what your hip replacement surgery is likely to cost you, first ask for a price estimate from your provider.&nbsp; Make sure to ask about the type of implant they’re planning to use, the estimated length of the surgery and how long they think you’ll need to stay in the hospital.&nbsp; Then shop around to make sure you’re getting the best price for quality care.

- Once you’ve chosen your provider and have their estimate, get the following information from your insurance company:
- Amount remaining on your deductible.
- Co-insurance you’re responsible for.
- Max out-of-pocket cost.

Once you have that information, you can calculate how much the hip replacement surgery is likely to cost you personally.&nbsp; It sounds like a lot of work up front but a little research and shopping around can be the difference between paying thousands (or tens of thousands) of dollars for your surgery, and paying $500.

## Medical Expense Series

[The Cost of Breast Cancer](https://livelyme.com/blog/the-cost-of-breast-cancer/)
[The Cost of Knee Replacement Surgery](https://livelyme.com/blog/the-cost-of-knee-replacement-surgery/)
[The Cost of Childbirth](https://livelyme.com/blog/the-cost-of-childbirth/)


What is the Average Cost of Hip Replacement Surgery?

Cardiac bypass is the most common type of heart surgery performed on adults in the US.&nbsp; What’s not common is finding two patients who have paid the same amount for the procedure.&nbsp; As with most health services, the price you’ll pay for bypass surgery depends largely on the facility performing the operation and the region of the country where it’s located.&nbsp; The cost will also depend on any complications involved

## Average surgery cost

According to [Debt.org](https://www.debt.org/medical/hospital-surgery-costs/), the average cost of bypass surgery in the US in 2020 was $30,000 to $200,000. That included:
- Pre-op visits with the surgeon.
- Operating room fees. This is the hourly rate to rent the operating room.Anesthesia. This is the fee of the anesthesiologist who administers the anesthesia necessary for your surgery.
- Surgeon’s fees for the operation. 
- Pre-and post-operation hospital stay.
- This is based on an average hospital stay of 6-7 days for bypass surgery.
- Pre-surgical treatment. This could be catheterization or any other treatment necessary to ensure that the bypass surgery is successful.
- Anti-rejection medication. This medication prevents your body from rejecting the new arteries.

## What the total doesn’t include:

Insurance premiums. This is the monthly fee you have to pay just to keep your insurance active. You may also be responsible for your annual deductible and will have to pay any applicable co-payments until you reach your out-of-pocket maximum. Those charges are on top of your monthly insurance premiums.

Physical therapy after the operation. After bypass surgery, most patients need physical therapy to learn how to move properly without harming the incision. They also must learn exercises that will assist in recovery.  Physical therapy can cost between $50 and $350 an hour and might not be covered by insurance.

Additional medications you might need. These could include blood-thinning medication to prevent blood clots ($15-200 per month), beta-blocker medication to slow your heart rate ($10-200 per month), statins to lower your cholesterol ($10-200 per month), and an ACE inhibitor to control your blood pressure and prevent heart failure ($10-100 per month).

Lost wages. Additional miscellaneous expenses like caregiving, travel and anything else you might have to pay as a result of having bypass surgery.

## What will you pay?

If you have insurance, you’ll be responsible for paying your monthly premiums and for all costs up to the amount of your policy’s deductible.  If your deductible is $5,000, for example, then you’ll have to pay for the first $5,000 of your care before your insurance will kick in (unless you’ve already incurred other costs for the calendar year which would count against the deductible).  After that, your insurance will probably require you share in the cost of your care.  If so, the amount you’re responsible for is called the “co-payment” or “co-insurance.”

Your health plan also has a maximum out-of-pocket amount.&nbsp; This is the most you’re required to pay out of pocket for your medical care in any calendar year.&nbsp; Since the cost of bypass surgery is so high, you’ll almost certainly hit the out-of-pocket maximum before the total cost of the surgery has been paid.&nbsp; At that point, your insurance will cover all remaining covered charges, except for the miscellaneous expenses mentioned earlier.

To get a realistic estimate of the amount you’ll have to pay for bypass surgery if you are covered under health insurance, just look at the maximum annual out-of-pocket limit on your policy. Chances are, you’ll end up paying just about all of that amount.

### If you are covered by medicaid or medicare

There’s relatively little to worry about if you have Medicaid coverage and have to undergo coronary bypass surgery. Aside from any monthly premiums you may have to pay if you also receive Social Security, Medicaid covers 100 percent of a bypass procedure, without deductibles or copays. The only other costs you may have to pay out-of-pocket are for physical therapy or non-prescription medications, depending on how robust your state’s Medicaid policies are.

Medicare is more complicated. Those who only have basic Part A (in-patient) and Part B (outpatient and emergency room) coverage will still be responsible for 20 percent of approved charges (and 100 percent of non-approved charges) after the small minimal deductible is satisfied. That can be tens of thousands of dollars for a heart bypass.

For that reason, 95 percent of Medicare patients opt for more-expensive Medicare Advantage or supplemental plans. Advantage places a maximum limit on out-of-pocket costs, while supplemental coverage pays for almost everything that traditional Medicare doesn’t cover. These plans are well worth their cost, since older patients are more likely to require expensive medical or surgical treatment over time.

### What if you don’t have insurance?

The best advice, of course, is to get insurance if you don’t have it. That’s easier said than done, though, particularly if you’ve had a heart attack and the doctor says that you need immediate cardiac surgery. It’s unlikely that you’ll be able to enroll in a health care plan while you’re being wheeled from the ER into the operating room.

However, if you suffer from recurring chest pain or have been diagnosed with coronary artery disease – and you don’t have health insurance – it’s still possible to sign up for coverage before you potentially need surgery. The Affordable Care Act (also known as Obamacare) guarantees that you can’t be turned down because of an existing condition. So patients with heart disease are now able to buy insurance coverage before their disease progresses to the point when they need a coronary artery bypass graft or other expensive procedure.

If you have to have surgery without insurance, many hospitals give patients who pay in cash a 30-35 percent discount.  But even with a 35 percent discount, you could still end up being responsible for $80,000 or more in medical bills.

In order to reduce the cost of surgery, make sure to shop around.&nbsp; Fees will differ between facilities, surgeons, anesthesiologists, and pharmacies, even if they’re within the same region. Be sure to ask for a complete cost breakdown for your procedure or medications before choosing which providers you’ll use.

Another thing to remember is that it’s OK to negotiate.&nbsp; Health insurance companies negotiate the cost of their patients’ care all the time, but it’s not an option that occurs to most individual patients.&nbsp; However, it is possible.&nbsp; To find the best deal, contact the billing department of each facility and ask for the best rate they offer insurance companies.&nbsp; If you’re nice, they just might give it to you.

One final option might be to investigate the possibility of having your heart bypass surgery done in another country where costs are much lower. “Medical tourism” has become a big business, with more and more American patients choosing to have their operations in nations like India, Costa Rica or Mexico.

Those countries have major medical centers with highly-regarded cardiologists on staff, and the cost of procedures is significantly lower than in the United States. For instance, a coronary bypass averages around $10,000 in India and $40,000 in Mexico (not including travel to and from the destination, or in-country recovery after release from the hospital). Obviously, that’s a bargain compared to the $123,000 the average procedure costs in America.

## Final advice

The cost of your bypass surgery will depend mostly on where you’re having the surgery done and the complications involved.&nbsp; Before choosing a hospital and surgeon, make sure you understand what their total cost estimate is, what it includes and what your insurance is going to cover. After all, the only thing worse than recovering from major surgery is being surprised by an enormous hospital bill in the mail during your recovery.

If you have a [high deductible health plan](https://livelyme.com/guides/hdhp/), a [Health Savings Account](https://livelyme.com/guides/hsa-guide/) can be a great way to save money on health-related expenses. Lively offers top-rated HSAs. [Learn more](https://livelyme.com/features/) and sign up today! 


The Costs of Heart Bypass Surgery

<p>More than a million Americans have joint replacement surgery each year. Knee replacements lead that with 720,000 each year. These surgeries are also becoming more common. With that in mind, how much will it cost you?</p>
<p></p>
<h4>The Cost of Knee Replacement Surgery</h4>
<p>These costs are for total knee replacement. You can expect partial knee replacement to be&nbsp;<a href="https://www.healthline.com/health/total-knee-replacement-surgery/understanding-costs#1">10-20% lower</a>.</p>
<ul>
<li><strong>Base Surgery Cost</strong>&nbsp;&#8211; $49,500</li>
<li><strong>In-Patient Hospital Cost</strong>&nbsp;&#8211;&nbsp;$7,500</li>
<li><strong>Home Upgrade Requirements</strong>&nbsp;&#8211; the exact value is hard to calculate, but if you need a reference point items like railings, ramps and/or bathroom modifications could be required to help temporarily or permanently&nbsp;for your mobility needs.</li>
<li><strong>Total Cost&nbsp;</strong>&#8211;&nbsp;<a href="https://www.healthgrades.com/explore/the-10-most-common-surgeries-in-the-us">$57,000</a></li>
</ul>
<h4>Knee Replacement Surgery Factors &#8211; Other Costs</h4>
<ul>
<li><strong>Pre-Existing Conditions</strong>&nbsp;&#8211; These can create stipulations or complications. They often increase surgery costs.</li>
<li><strong>Type of Surgery</strong>&nbsp;&#8211;&nbsp;<strong>&nbsp;</strong>This is reasonable and easy to understand. As outlined above, you can expect total knee repairs to be more expensive than partial knee repairs.</li>
<li><strong>Length of Hospital Stay</strong>&nbsp;&#8211; Additional hospital stays can cost&nbsp;<a href="https://www.beckershospitalreview.com/finance/average-cost-per-inpatient-day-across-50-states.html">over $1,000/day</a>, not including any complications or&nbsp;additional&nbsp;care that likely accompany them. The longer the stay, the more costly it will be.</li>
<li><strong>Finding &#8220;Normal&#8221; Again</strong>&nbsp;&#8211; It is hard to calculate costs for this line item, but please be aware there could be unseen physical and emotional costs to major surgeries, like a knee replacement.</li>
<li><strong>Lifestyle Costs&nbsp;</strong>&nbsp;&#8211; What none of these costs&nbsp;factors consider are the financial effect on your lifestyle. Consider your commute. If you walk, bike or take public transit you might be required to find a more comfortable form of travel. Costs for taxis, Ubers / Lyfts or other forms of travel might occur. Time off from work (and loss of income) top this list as well.</li>
</ul>
<p>A major surgery like knee replacement will not only affect your savings account but also your lifestyle. This can compound costs. Be conscious of these combined costs so you can fully forecast the impact on your savings.</p>
<h4>The Cost of Knee Replacement Surgery with Insurance</h4>
<p>These costs are why you have a health insurance&nbsp;safety net. With that in mind, how much will you have to pay out&nbsp;of pocket for knee&nbsp;replacement surgery?</p>
<p>That all depends on your insurance. Let&#8217;s use an HDHP as an example. HSA-eligible HDHPs in 2019&nbsp;have&nbsp;the following expense criteria:</p>
<ul>
<li>Annual minimum deductibles of $1,350 for individuals and $2,700 for families.</li>
<li>Annual out-of-pocket maximum can’t be more than $6,750 for individuals and $13,500 for families.</li>
</ul>
<p>Someone on an individual HSA eligible HDHP can expect to pay $8,100 for the year.</p>
<p>An individual or family on an HSA eligible family HDHP can expect to pay $16,200 for the&nbsp;year.</p>
<p>What is important to understand here, any expenses you have already paid into this would already be accumulated&nbsp;in these costs. These costs include total expenses of which the cost of knee replacement would factor in. Combined they are your yearly total health expense liability.</p>
<p><strong>Wait!&nbsp;</strong>There could be more costs. Out-of-pocket and deductible costs aren&#8217;t the only factor in this cost equation. You must have a clear understanding of what your insurance will cover. Even with an increasingly common procedure like a knee replacement, some costs won&#8217;t be covered, or only partially&nbsp;covered. Be proactive. Ask questions, so you don&#8217;t get an expected bill that will cost you an arm and a leg (pun intended).</p>
<p><strong><em>Pro Tip</em></strong><em>&nbsp;&#8211; Make sure you submit any and all expenses to your insurance company, this includes copays if possible. Otherwise, these expenses&nbsp;won&#8217;t be counted toward your deductible or out-of-pocket costs.</em></p>
<h4>How to Save 25% Off the Cost of Knee Replacement Surgery</h4>
<p><a href="https://livelyme.com/add-1-hsa-day-1/">Open and establish an HSA</a>. This will allow you to use pre-tax funds for pay for your medical expenses. Tax-savings can equate to 25% off the retail costs (assumes combined state and federal income tax of 25% or more). This is an incredible way to reduce your out-of-pocket and rising healthcare costs. The sooner you get started the more opportunity you have to save. Your HSA funds never expire. They are there for life!</p>
<p>Now that you understand the cost of knee&nbsp;replacement surgery, you can use our&nbsp;<a href="/hsa-contribution-calculator/">HSA contribution</a>&nbsp;and&nbsp;<a href="https://livelyme.com/calculator/">savings tools</a>&nbsp;to see how much you need to save each year to prepare for these large health expenses. Get started today, your future self will thank you.</p>

<h3>Medical Expense Series</h3>

<ul><li><a href="https://livelyme.com/the-cost-of-breast-cancer/">The Cost of Breast Cancer</a></li><li><a href="https://livelyme.com/the-cost-of-knee-replacement-surgery/">The Cost of Knee Replacement Surgery</a><br></li><li><a href="https://livelyme.com/hip-replacement-cost/">The Cost of Hip Replacement Surgery</a><br></li><li><a href="https://livelyme.com/the-costs-of-bypass-surgery/">The Cost of&nbsp;ByPass&nbsp;Surgery</a><br></li><li><a href="https://livelyme.com/the-cost-of-childbirth">The Cost of Childbirth</a></li><li><a href="https://livelyme.com/blog/real-cost-hospitalization-covid-19/">The Cost of Hospitalization with COVID-19</a></li></ul>


<p>An estimated 12.3% of women in the U.S. will receive a breast cancer diagnosis in their lifetime, making it the most common type of cancer for American women. Since it’s so common, you’d think there’d be a standardized way to price treatment.&nbsp; But it turns out the cost of breast cancer depends largely on the stage of diagnosis and the treatment options you choose. Add these variables to the geographical differences in health care pricing and the wide arrange of health plans available, and each diagnosis could have a unique price tag.</p>

<p><strong>The Average Cost of Breast
Cancer</strong></p>

<p>In response the wide range in cost, the National Institute
of Health published a <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4822976/">study</a>
in 2016 attempting to answer the question: how much does breast cancer cost?
Researchers only studied people with commercial insurance (versus people with
Medicare or who lack insurance) and they came to the following conclusions:</p>

<ul><li>In the first 12 months after diagnosis, the average cost for breast cancer treatment was as follows: <ul><li>Stage 0: $60,637 </li></ul><ul><li>Stage I/II: $82,121 </li></ul><ul><li>Stage III: $129,387 </li></ul><ul><li>Stage IV: $134,682 </li></ul></li><li>Average cost in the 24 months after diagnosis was: <ul><li>Stage 0: $71,909 </li></ul><ul><li>Stage I/II: $97,066 </li></ul><ul><li>Stage III: $159,442 </li></ul><ul><li>Stage IV: $182,655 </li></ul></li><li>Total cost was largely driven by the cost of chemotherapy and non-cancer treatments.</li><li>The lower costs for those diagnosed at “Stage 0” vs. “Stage IV” reflected the curative nature and cheaper cost of surgery for early stages of the disease.</li><li>For those diagnosed with Stage IV breast cancer, chemotherapy was responsible for the highest percentage of costs within the first 12 months.</li><li>In months 13-24 of treatment, chemotherapy was responsible for the greatest percentage of costs for all stages of the disease.</li></ul>

<p><strong>What Does That Mean
for You?</strong></p>

<p>The costs above are just averages so what a breast cancer
diagnosis will cost you personally depends on your stage, the treatment options
you choose (e.g. a double mastectomy and breast reconstruction costs more than
breast-conserving surgery) as well as your health plan.</p>

<p>If you’ve been diagnosed with breast cancer you need to look
at three things: </p>

<ol><li>Your deductible.</li><li>The co-pays and co-insurance you’re responsible
for.&nbsp; Something to note, an oncologist is
often considered a specialist and as such, your insurance could charge a higher
co-pay for these visits than it would charge you for a regular doctor visit.</li><li>Your maximum out-of-pocket cost.</li></ol>

<p>Unless you have an extremely high maximum out-of-pocket cost
combined with an easily treatable form of breast cancer, you’re most likely
going to hit your out-of-pocket maximum before you finish paying for your
cancer treatment.&nbsp; If that happens, your
insurance company will pick up the remainder of the bill for the rest of the
year.&nbsp; </p>

<p>Something else to note, however, is your deductible and
out-of-pocket maximum reset every calendar year. So if you’re diagnosed in
October and your treatment straddles two calendar years, you could end up
paying more out of pocket than you would if you’d been diagnosed in earlier in
that first year.</p>

<p><strong>What if You Don’t
Have Insurance?</strong></p>

<p>First, the best thing to do is to get some sort of insurance
coverage. Not just because it will help you pay for the total cost of
treatment, but because people without health insurance often pay between 2 and 43
times what insured people pay for treatment.&nbsp;
That’s because commercial insurers and Medicare have the ability to
bargain and negotiate treatment costs with doctors and hospitals, but
individuals don’t have that same bargaining power.</p>

<p>If you’re unable to buy some sort of insurance coverage,
contact the hospital to see if they have an assistance program or payment plan
that will help alleviate some of the financial strain. Some additional ways to
cut down on costs include taking generic drugs, asking for samples of
prescribed medicine and calling drug makers to see if you qualify for financial
assistance.</p>

<p>The bottom line is: the cost of breast cancer varies widely so it’s best to work with your doctor to ensure you’re getting effective treatment that’s also affordable.  </p>

<h3>Medical Expense Series</h3>

<ul><li><a href="https://livelyme.com/the-cost-of-breast-cancer/">The Cost of Breast Cancer</a></li><li><a href="https://livelyme.com/the-cost-of-knee-replacement-surgery/">The Cost of Knee Replacement Surgery</a><br></li><li><a href="https://livelyme.com/hip-replacement-cost/">The Cost of Hip Replacement Surgery</a><br></li><li><a href="https://livelyme.com/the-costs-of-bypass-surgery/">The Cost of&nbsp;ByPass&nbsp;Surgery</a><br></li><li><a href="https://livelyme.com/the-cost-of-childbirth">The Cost of Childbirth</a></li><li><a href="https://livelyme.com/blog/real-cost-hospitalization-covid-19/">The Cost of Hospitalization with COVID-19</a></li></ul>



<p>Having a baby is one the most momentous occasions in your life.&nbsp; It should be a happy time where you’re figuring out how to be a parent and feed, bathe and clothe this wonderful little creature that’s just come into your life.&nbsp; Unfortunately, some parents are surprised by a hospital bill that’s much higher than they were anticipating.&nbsp; Even if they have health insurance.</p>

<p>Why is this?&nbsp; The cost
of childbirth, like all other healthcare costs, depends on:</p>

<ul><li>The type of health insurance you have (if you
have health insurance).</li><li>Where you have your baby (costs vary depending
on state regulations and regional care providers).</li><li>The type of birth you have (e.g. vaginal vs.
cesarean).</li><li>Any complications related to your birth.</li><li>How long you stay in the hospital.</li><li>Whether your baby requires specialized care.</li><li>Whether the providers at the hospital are in
your network.</li></ul>

<p><strong>Average Cost of a
Hospital* Childbirth in the U.S.</strong></p>

<p>*<em>There isn’t good data collected on the cost of home births or childbirth
in birthing centers, so this post will focus specifically on the cost of
childbirth in a hospital</em><em>.</em>&nbsp; </p>

<p>In 2013, a study by the advocacy group Childbirth Connection
found the national average cost for an uncomplicated vaginal birth including
newborn care was $32,093.&nbsp; It was $51,125
for a standard cesarean (C-section) including newborn care.&nbsp; Again, costs vary by state largely because of
two factors: </p>

<ol><li>Regulations that vary from state to state, <g class="gr_ gr_20 gr-alert gr_spell gr_inline_cards gr_run_anim ContextualSpelling ins-del multiReplace" id="20" data-gr-id="20">and</g></li><li><g class="gr_ gr_20 gr-alert gr_spell gr_inline_cards gr_run_anim ContextualSpelling ins-del multiReplace" id="20" data-gr-id="20">The</g> amount of competition healthcare providers face.</li></ol>

<p>A <a href="http://time.com/money/4995922/how-much-costs-give-birth-state/">chart</a>
published by Time.com illustrates this perfectly.&nbsp; It shows a study completed in 2016 and 2017
that found the average cost of a vaginal childbirth in the U.S., not including
the cost of newborn care, ranged from $5,017 in Alabama to $10,413 in
Alaska.&nbsp; The average cost of a C-section,
ranged from $7,439 in Washington, D.C. to $14,528 in Alaska. </p>

<p>In each scenario, Alaska is the most expensive state in the
country to give birth.&nbsp; That’s because Alaska’s
remote location makes the cost of most goods more expensive, and it’s largely
rural, which means there’s not a lot of healthcare providers vying for
patients.&nbsp; When there’s one dominant
healthcare provider in an area, insurance companies don’t have the same
leverage to negotiate prices for services and that means those services usually
cost more.</p>

<p><strong>Why C-Sections are
More Expensive than Vaginal Births</strong></p>

<p>C-sections are major surgery.&nbsp; You have to pay for a sterile operating room,
anesthesia, a longer hospital stay and you’re more likely to have
complications.&nbsp; The more complications
inherent in a type of birth, the higher the average cost of that type of birth.</p>

<p><strong>Complications Make
Everything More Expensive</strong></p>

<p>A diabetic woman will pay on average 55% more to give birth
than a woman who is otherwise healthy.&nbsp;
Healthcare for premature and low-birth weight babies costs almost 11
times more, on average, than care for an otherwise healthy baby.&nbsp; Even a vaginal delivery with complications
will cost an average of $6,900.&nbsp; This is
because complications mean more doctors, procedures, medication and longer
hospital stays that all add to the total bill.</p>

<p><strong>How Much will this Cost You?</strong></p>

<p><strong> </strong>It depends on your insurance.&nbsp; If you don’t have health insurance, you will be responsible for everything.&nbsp; If you do have health insurance, it will depend on your deductible, co-pays, maximum out-of-pocket amount and the time of year you have the baby.</p>

<p>For instance, if you have the baby in October and you’ve
already met your deductible for the year, you will likely only have to pay any
co-pays you’re responsible for, up until you reach your out-of-pocket maximum
(of which the deductible is included).&nbsp;
If you have your baby in January, you’ll likely have to pay for your
deductible, then any co-pays your responsible for, up to your out-of-pocket
maximum.&nbsp; But this only includes care
provided by in-network healthcare professionals.</p>

<p><strong>The “Surprise
Billing”</strong></p>

<p>Another thing that can increase the cost of childbirth
dramatically, is care provided by out-of-network doctors and specialists.&nbsp; Unless you’re giving birth in an HMO-owned
hospital (and you have that HMO), you could potentially have your healthcare
administered by providers not in your healthcare network.&nbsp; These would include an ER doctor in the case
of an emergency, an ambulance ride from a carrier not included in your health
insurance network, anesthesia administered by an out-of-network
anesthesiologist, or out-of-network neonatal specialists.</p>

<p>Even if you have really good insurance, you could end up
paying for a large percentage of the care administered by out-of-network health
providers and that could turn out to be hundreds of thousands of dollars.</p>

<p>If the cost of having a baby surprises you, you’re not
alone.&nbsp; Despite any of the above factors,
the cost to have a baby in a hospital in the U.S. is more than it is in any
other industrialized nation in the world.&nbsp;
The next closest country in terms of cost is Switzerland and their costs
average less than half of what parents and insurers pay in the U.S.</p>

<p>So if you’re pregnant and have health insurance, make sure you know what your financial responsibilities are and talk to your doctor to make sure only in-network health providers will treat you and your baby.  If you don’t have health insurance, get some.  Federal law prohibits insurers from treating pregnancy as a pre-existing condition, so there should be some options available for you in your area.</p>

<h3>Medical Expense Series</h3>

<ul><li><a href="https://livelyme.com/the-cost-of-breast-cancer/">The Cost of Breast Cancer</a></li><li><a href="https://livelyme.com/the-cost-of-knee-replacement-surgery/">The Cost of Knee Replacement Surgery</a><br></li><li><a href="https://livelyme.com/hip-replacement-cost/">The Cost of Hip Replacement Surgery</a><br></li><li><a href="https://livelyme.com/the-costs-of-bypass-surgery/">The Cost of&nbsp;ByPass&nbsp;Surgery</a><br></li><li><a href="https://livelyme.com/the-cost-of-childbirth">The Cost of Childbirth</a></li><li><a href="https://livelyme.com/blog/real-cost-hospitalization-covid-19/">The Cost of Hospitalization with COVID-19</a></li></ul>


To lower your healthcare costs you enroll in a high-deductible health plan (HDHP). That's because HDHPs have lower insurance premiums (but higher deductibles).

Since HDHPs have higher deductibles, you can help keep your healthcare costs low by using preventive care and a medical savings account (known as an HSA).

1. Most HDHPs cover preventive care (like a physical exam) with zero out-of-pocket. So keeping up with preventive care is a smart way to avoid costly illnesses (and to feel good!).

2. You can continue to lower your healthcare costs by using a health savings account. In fact, a high-deductible health plan works best in combination with a health savings account.

Read this guide if you want to learn how to use a tax-advantaged health savings account (HSA) to pay for qualified medical expenses, save money, and lower your taxes.

<h2>Who should read this</h2>

This material applies to individuals & families that want to lower their healthcare costs and be financially effective with their high-deductible health plan (HDHP).

It’s important that you learn about HSAs if you have (or plan to enroll in) an HDHP. It will help you save big.

If you’re in the process of enrolling in an HDHP then choose a plan that is compatible with an HSA. The IRS defines an HDHP as having:

- $1,350 minimum annual deductible for self-only health care coverage and $2,700 for family coverage (both unchanged from 2018)

- $6,750 maximum for self-only health care coverage (a $100 increase from 2018), and $13,500 for family coverage (a $200 increase from 2018)

Jump to:

- [Health Plan Terms](#health-plan-terms)
- [Definition of an HSA](#definition)
- [HSA vs FSA](#hsa-vs-fsa)
- [HSA vs PPO](#hsa-vs-ppo)
- [Benefits of an HSA account](#benefits)
- [How to qualify for an HSA account](#how-to-qualify)
- [How to maximize your savings](#how-to-maximize)
- [How to use your HSA funds](#how-to-use)
- [How to open an account account](#how-to-open)
- [Frequently asked questions](#faq)

<h2 id="health-plan-terms">Some Health Plan Terms</h2>

Before we move forward, let’s define a few terms you’ll come across when shopping for health plans. If you know these feel free to skip to the next section.

- Deductible: This is what you pay upfront for your medical care before your insurer’s coverage kicks in. Once you meet your deductible your insurer covers a large part of the bill. It resets every year.

- Premium: This is what you pay every month to the insurance company to have health insurance whether you use it or not.

- Copay: Predetermined rate you pay to access healthcare services. With your plan, you could have to pay $20 every time you go to the doctor’s office or a $10 copay for your monthly medication.

- Coinsurance: Once you meet your deductible, your health insurer takes up the bulk of your medical bills. But not all of it. Your co-insurance is the percentage of a medical bill you pay for after you meet your deductible. For instance, with a 25% coinsurance, you would pay 25% of each medical bill, and your health insurance provider will cover the remaining 75%.

- Out-of-pocket limit: But you can’t just keep paying for your healthcare, otherwise in a bad health year even with the best plan you would become bankrupt. Your out of pocket limit is the absolute maximum you would need to pay for your healthcare in a year before your health provider covers 100% of the bill.

<h2 id="definition">What is an HSA?</h2>
Health care costs for Americans have been skyrocketing. And an HSA can help you (and your family) plan for and beat the rising costs.

So what exactly is an HSA?

A Health Savings Account (HSA) is an easy and smart way to pay for qualified medical expenses for you and your dependents. With its tax-advantages, easy access to savings, and future growth potential it’s an effective savings vehicle that provides benefits today and in the future.

You can [open an HSA easily and in only a few minutes with Lively](https://livelyme.com/). Then you can contribute to your account (which is FDIC insured) with pre-tax dollars. As a result, you’ll lower your income tax (which is a significant tax benefit).

Using your HSA funds is also easy. We cover it below in the ‘[How to use your HSA funds](https://paper.dropbox.com/doc/2019-Guide-to-HSA--AR5sdUz22mf7__AoRI1xvIORAg-EtPIRt4gBzgxqKMnnuDyY#:uid=463786104738843322001399&h2=How-to-use-your-HSA-funds)’ section.

<h2 id="hsa-vs-fsa">HSA vs FSA</h2>

Health savings account versus a flexible spending account

FSA stands for flexible spending account. It’s an account your employer makes available to you so you can pay for medical expenses with pre-tax dollars.

With both an HSA and an FSA, you can pay for out-of-pocket medical expenses—like copays, medical bills, and vision expenses—while __lowering your taxable income.__

But an FSA is different than an HSA. Read our HSA vs FSA blog post to find out which account is better for you.

<h2 id="hsa-vs-ppo">HSA vs PPO</h2>

It's not a choice between an HSA plan and a PPO plan.

__An HSA account helps you save for medical expenses. It’s not a form of health insurance.__

__A PPO, on the other hand, is a form of health insurance.__ PPO stands for Preferred Provider Organization and refers to the type of network you can access for healthcare.

PPO plans are traditional plans that tend to have lower deductibles and higher premiums. Other healthcare plans like a health maintenance organization (HMO) have lower premiums and low or almost no deductibles, but you have a smaller choice of providers.

The question isn’t whether an HSA is better than a PPO. The question is do you want a high-deductible plan, or do you want a low deductible plan? And if you opt for a high-deductible plan then you’ll be financially efficient if you also enroll in a health savings account.

Our [HSA vs PPO blog post](https://livelyme.com/hsa-vs-ppo/) helps you decide if a PPO or an HDHP + an HSA is right for you.

<h2 id="benefits">Benefits of an HSA account</h2>

An HSA is like a supercharged IRA. It’s approved by the Internal Revenue Service (IRS). And it’s great for your federal tax and state tax returns.

That’s because your HSA contributions are tax-deductible from your income tax, __meaning you can lower your tax burden.__

An HSA offers triple tax savings:

- Pre-tax or tax-deductible contributions
- Tax-free interest and investment earnings
- Tax-free distributions, when used for qualified medical expenses

HSAs are also portable. This means that you always keep your HSA. This is true even if you change employers or stop working. Unlike a [Flexible Spending Account (FSA)](https://livelyme.com/hsas-vs-fsas/), there is no “use-it-or-lose-it” rule with HSAs. If you don’t use funds, they remain in your HSA each year. They also continue to earn tax-free interest.

So take control of your healthcare costs and plan for your future by [opening an HSA](https://livelyme.com/).

__1. Save more for your health__

Contributions to an HSA are tax deductible. Paying with these funds means you’ll pay less for health expenses.

__2. Health safety net__

Rollover your HSA funds from year to year. Unlike a flexible spending account, your contributions don’t have to be used within the year.

__3. Put your money to work__

From day 1, you can establish an investment account using your HSA contributions, with a variety of mutual funds to choose from.

__4. The 401(k) of healthcare__

After age 65 you can use your HSA money for non-health related expenses and just pay income taxes on your withdrawals. No penalty!

<h2 id="how-to-qualify">Qualifying for an HSA account</h2>

To qualify for an HSA you need to a health insurance plan known as an HDHP.

High-deductible health plans have lower premiums and higher deductibles. And to qualify for an HSA,the HDHP must satisfy certain IRS requirements with respect to deductibles and out-of-pocket expenses.

Based on 2019 IRS specifications, qualifying HSA health plans must have minimum deductibles of $1,350 for individuals and $2,700 for families. In addition, qualifying plans must have maximum out-of-pocket amounts of less than $6,750 for individuals and $13,500 for families.

With an HDHP, you generally pay more up front for medical expenses before the plan begins to pay for covered services. In return, you will generally pay less in premiums than in other medical plan options. Otherwise, an HSA-eligible health plan is much like a traditional health care plan.

For more information on if you qualify for an HSA check out [IRS publication 969](https://www.irs.gov/forms-pubs/about-publication-969%5d).

__Not sure if you qualify? Use our free calculator__

Lively created the industry’s first [HSA eligibility calculator](https://livelyme.com/signup-eligibility/). It algorithmically calculates hundreds of HSA contributions scenarios to show you exactly how much you can contribute. You can see it live here.

<h2 id="how-to-maximize">Maximizing your savings (2019 contribution limits)</h2>

To take full advantage of tax savings and to build a reserve for the future, it is suggested that you make the maximum contribution as set by the IRS. So there are HSA contribution limits? Yes.

For those of you who want the quick answer: the HSA contribution limits for 2019 are __$3500 for an individual__ and __$7000 for a family__. If you are 55 or older your catch-up contributions are limited to an __extra $1000 a year__.

Read our [2019 HSA Contribution Limits](https://livelyme.com/2019-and-2018-hsa-contribution-limits/) blog post for a complete look at contribution limits and to learn how to maximize your savings.

<h2 id="how-to-use">How to use your HSA funds</h2>

You can use your HSA funds as you would the funds in your bank account: with your debit card.

After you enroll in an HSA, Lively sends you a branded debit card.

The catch is you can only use HSA money for qualified medical expenses. These costs generally include payment to doctors or dentists, over-the-counter [prescription](https://www.nerdwallet.com/blog/health/2014/03/24/cheap-prescriptions/) drugs, imaging such as MRIs, medical services (such as home care) and medical equipment or supplies.

With a Lively HSA, you can also reimburse yourself for any qualified medical expenses that your insurance didn’t cover and you had to pay out-of-pocket.

Lively created a [free-to-use search engine](https://livelyme.com/whats-eligible/) to find out if what you want to buy is a qualified medical expense. You can also visit [HSA Store](https://hsastore.com/?a_aid=59ee38ee1506b&a_bid=87383ed8&utm_source=Lively&utm_medium=TPA+Portal+EL+List&utm_campaign=TPA+Partner) to find and purchase thousands of eligible expenses.

Q) Can an HSA be used for glasses?

A) Yes, as long as the sunglasses have prescription lenses and were not bought over-the-counter.

Q) Can an HSA be used for dental?

A) You can include in medical expenses the amounts you pay for the prevention and alleviation of dental disease. Preventive treatment includes the services of a dental hygienist or dentist for such procedures as teeth cleaning, the application of sealants, and fluoride treatments to prevent tooth decay. Treatment to alleviate dental disease include services of a dentist for procedures such as X-rays, fillings, braces, extractions, dentures, and other dental ailments.

<h2 id="how-to-open">How to open an account</h2>

Open and FDIC-insured health savings account in minutes with Lively.

Lively brings HSA into the modern era so it’s easier for you to keep healthcare costs low today and plan for the costs of tomorrow.

__1. Why Lively HSA__
<iframe title="Why Lively HSA?" width="640" height="360" src="https://www.youtube.com/embed/6Yx8YS3wQ2o?feature=oembed" frameborder="0" allow="accelerometer; autoplay; encrypted-media; gyroscope; picture-in-picture" allowfullscreen></iframe>

__2. How to easily open an HSA__
<iframe title="Setup HSA Account Tutorial 💵 How to set up a Health Savings Account with Lively" width="640" height="360" src="https://www.youtube.com/embed/jysGYakLFQ8?feature=oembed" frameborder="0" allow="accelerometer; autoplay; encrypted-media; gyroscope; picture-in-picture" allowfullscreen></iframe>

<h2 id="faq">Frequently asked questions</h2>

Q) Is an HSA also health insurance?

A) No, it isn’t. Health insurance is provided by an insurance company. An HSA is not insurance coverage. For our full answer, read our [Is HSA health insurance?](https://livelyme.com/is-hsa-health-insurance) blog post.

Q) Is an HSA tax-deductible?

A)Yes. But you need to fill out the right forms. Read our blog post on [HSA Tax Forms](https://livelyme.com/what-hsa-tax-forms-do-you-need-to-fill-we-know/).

Q) Are HSA contributions pre-tax?

A) Your HSA contributions are pre-tax if made by payroll deduction.

Q) What happens if I use my money to pay for a non-qualified expense?

A) If you are under 65 years old, you will have to pay ordinary income taxes as well as pay a 20% penalty for the amount you’re disbursed out of your HSA account. If you are 65 or older, disabled or die, then you will just pay ordinary incomes taxes (no penalty). If you find yourself in this situation, you can attempt to put money back into your HSA funds before tax time each year.

Q) Does an HSA roll over?

A) Once funds are deposited into the HSA, the account can be used to pay for qualified medical expenses tax-free, even if you no longer have HDHP coverage. The funds in your account roll over automatically each year and remain indefinitely until used. There is no time limit on using the funds.

<h2>Get a free HSA</h2>

Things like your flexibility in contributing, the ability to keep your unused balance and additional tax benefits make HSAs the wisest choice. So [sign up for an HSA – it's free →](https://livelyme.com/)

HSA Guide 

Learn how to use a Health Savings Account to pay for qualified medical expenses for you and your dependents.

Health Savings Account Guide - IRS-Qualified Medical Expenses & More

2019 HSA Guidebook

It’s that time of year again, when 80% of Americans spend less than an hour researching one of the most important decisions they’ll make this year: their health coverage.  Unfortunately, this often leaves many people under-insured or without the right coverage for their needs.  To prevent this from happening to you, we have a few tips that’ll help you make the right decisions for you and your family this [open enrollment season](https://livelyme.com/guides/open-enrollment/).

## What is open enrollment?

[Open enrollment](https://livelyme.com/guides/open-enrollment/), simply put, is [a period of time, usually two-to-six weeks](https://livelyme.com/blog/why-do-open-enrollment-periods-exist-for-health-insurance/), when people can enroll in health insurance and other benefits for the next year. It most often occurs in the fall, but some employers have specific open enrollment periods, so if you are not sure when your company's open enrollment takes place, it's always a good idea to ask. Outside of open enrollment, you often are not able to change your health insurance coverage without a "qualifying life event," such as having a baby, getting married, or losing other health coverage.

## Common mistakes

Because researching healthcare options can feel like a chore, during open enrollment, roughly 90% of Americans choose the health plan they had the previous year, despite any changes in health. This lack of research and [preparation for open enrollment](https://livelyme.com/blog/five-tips-to-prepare-for-open-enrollment/) can leave them under-insured. In addition, individuals often don't look into how their plans may have changed, even if it has the same name, and often neglect the full range of benefits their insurance plan and employer offers. 

## Six tips to help you determine your benefits package

These simple, actionable tips will help you select the best benefits for you and your family.

## Review your family’s recent health history

To make sure you’re buying the right coverage for your family’s needs, you need to know what those needs are. Take a look at what your family’s medical needs have been over the last two years. Assess:
- How did your current plan support you?  
- Where did it fall short?  
Then ask yourself if you or a family member has been recently diagnosed with a condition that will require ongoing treatment.  If so, you’ll want to take that treatment into account when choosing a plan.

## Assess recent or near-future life changes

Are you [getting married](https://livelyme.com/blog/tag/are-married-getting-married/)? [Pregnant, wanting to get pregnant, or adtopting a child](https://livelyme.com/blog/life-events-that-can-change-your-healthcare-costs/)? Are you planning to move away from your preferred doctor and want to make sure you have access to another health provider you like? To make the right decision for your health coverage, you’ll want to anticipate how these future changes will affect your healthcare needs.

## Check your current plan

Plan names can stay the same but the benefits included within them could change. So even if you keep the same plan as you had last year, it could end up costing you more or less depending on what changes your employer or the plan provider made. Possible changes to look for are:

- Coverage levels
- Pricing
- Types of products offered
- New providers for existing products
- New products from existing providers

## See if premiums and deductibles have changed

Sometimes companies change the amount to which they’ll contribute to their employees’ health plans. If your company has changed its contribution levels, this will likely affect the amount you pay in premiums and deductibles. It might also affect the attractiveness of HSAs and FSAs in order to help with those deductibles.

## Do your own research

Your company will likely put out official communication regarding your benefits options and reviewing its resources is a good place to start.  But it’s not a place to end.  Many companies provide resources to help consumers make the right choices when it comes to their benefits. By doing your own research, you’re more likely to get a neutral third party assessment of your plan options, and you might even find better benefits in the marketplace than your company is offering.

If you do find better plans that you think your company should consider, try sending them to your Human Resources (HR) Department. When HR knows what employees need, they can make better choices in terms of what benefits they offer in the future.

## Check your company’s wellness initiatives

Companies have realized that a healthier workforce is a more productive workforce. To incentivize healthy behavior, many have started programs that reward such behavior with increased benefits like a [greater HSA](https://livelyme.com/guides/hsa-guide/) or 401(k) contribution, lower premiums, or other perks like reimbursement for gym memberships. Check with your HR Department to see if you might qualify for any increased benefits.

Navigating the healthcare labyrinth can feel like a job in and of itself.  But if you follow our six tips, you’re more likely to make the right decisions for your family and could end up saving money over the course of the year.

## Learn more with Lively

Lively is a modern, health savings account (HSA) that helps you save for routine and unexpected healthcare expenses and plan for retirement. To learn more, check out our [resources on healthcare and financial wellness](https://livelyme.com/resources/), including our [open enrollment guide](https://livelyme.com/guides/open-enrollment/), or see if an HSA is a [fit for you](https://livelyme.com/features/).

Select the right healthcare insurance benefits for your family. Picture shows doctor doing a checkup on a child with his mother holding him.

child and mother at a family doctor visit 

80% of Americans spend less than an hour researching their health coverage. Follow these tips so you can make the right decisions for you and your family.

Open Enrollment Tips for Employees | Lively

Open Enrollment Tips for Employees

Familiar with the tax-saving benefits of a health savings account (HSA), and wondering how you can extend those benefits to your family? While an HSA is owned by one person, there is a way to tap into those HSA funds for the rest of your family. Discover how, and the differences between a family HSA and individual HSA.

## Your plan is dependent on your health care coverage

To be [eligible to contribute to an HSA](https://livelyme.com/hsa-guide#qualifying-for-an-hsa-account), you must enroll in an eligible [High-Deductible Health Plan](https://livelyme.com/blog/what-is-a-high-deductible-health-plan-hdhp/) (HDHP). The IRS sets annual minium deductibles for individual and family health care coverage, as well as annual out-of-pocket maximums, and usually update those annually based on inflation.

## What is a Family HSA?

![what-is-family-hsa](//images.ctfassets.net/6j8y907dne6i/2AyTsX5zWqJw75Sf8dPxjn/27b942e17c0757642c853d85db8abfe4/what-is-family-hsa.jpg)

While often referred to as a “Family HSA” account, there is actually no such thing. 

Each HSA is owned by one person. But family coverage under a qualifying HDHP allows you to use your HSA to pay for [qualifying medical expenses](https://livelyme.com/whats-eligible/) for yourself and your family. The type of health plan (individual or family) you’re enrolled in decides how much you can contribute to your HSA account in one calendar year. 

If you are enrolled in an individual qualifying high-deductible health plan, you will only be able to [contribute the individual maximum contribution](https://livelyme.com/blog/hsa-contribution-limits/) amount set annually by the IRS. If you and your family are covered by the same qualifying health plan, then your contribution limit is increased to the annual contribution limit set for families. One rule: To contribute the maximum family contribution limit, none of the family members can be claimed on another person’s [tax return](https://www.irs.gov/irb/2004-02_IRB). 

## Annual HSA Contribution Limits

![hsa annual contribution limit](//images.ctfassets.net/6j8y907dne6i/3mripn4V4Q51N7FfM26AEf/283c4bf5ded5d8aefbf448ea77e7b317/hsa_annual_contribution_limit.jpg)

If you are enrolled in an individual qualifying high-deductible health plan, you will only be able to [contribute the individual maximum contribution](https://livelyme.com/blog/hsa-contribution-limits/) amount set annually by the IRS. If you and your family are covered by the same qualifying health plan, then your contribution limit is increased to the [annual contribution limit set for families](https://livelyme.com/blog/hsa-contribution-limits/). 

One rule: To contribute the maximum family contribution limit, none of the family members can be claimed on another person’s [tax return](https://www.irs.gov/irb/2004-02_IRB). 

If enrolled in an HSA-eligible HDHP, and at least 55 years old—or will be 55 any time in the calendar year—you can make an extra $1,000 contribution. This is a [“Catch-Up” Contribution](https://livelyme.com/blog/what-is-an-hsa-catch-up-contribution/). 

## Real-life examples
### Individual health plan with HSA

During open enrollment, James chooses an HDHP because he wants to take advantage of his employer’s contributions to an HSA. James is not currently married and doesn’t have any dependents, so his health plan will cover only him.

As an individual, James can contribute up to the individual annual [HSA contribution limit](https://livelyme.com/blog/hsa-contribution-limits/) without a penalty.

### Family Health Plan with HSA
Fast forward a few years, and James is now married with two children. James is at a different company, but still has his HSA and an HDHP that covers him and his family.

James is now eligible to contribute the family limit to his HSA, and while the contribution limits often change annually, he knows he'll be able to contribute up the the annual family [HSA contribution limit](https://livelyme.com/blog/hsa-contribution-limits/) within one calendar year.

## Can I Have a Joint HSA With My Spouse?
![no-joint-hsa-with-spouse](//images.ctfassets.net/6j8y907dne6i/4JyBNCLJUiCy6ietwyTrGn/588c28e6b0352282f87b6d0c6643cfe9/no-joint-hsa-with-spouse.jpg)

*Short answer:* No. An HSA is owned by one person. 

Yet, there is a way for you and your spouse to have HSAs of your own. If you and your spouse are covered under the same HDHP, you can each open your own HSA and contribute separately. But, the amount you and your spouse contribute, combined, cannot exceed the contribution limit for a family plan. 

### Real-life examples:

#### Family HSA contribution limit with two accounts

Jack and Diane are married and covered under Jack’s high-deductible health plan. Diane wants to take advantage of her employer’s HSA contributions, so she decides to open up an HSA of her own. 

However, Jack and Diane’s total, combined contributions cannot exceed the family contribution limit set for the IRS that year. That means that whatever Jack contributes to his HSA and whatever Diane contributes to her HSA added together needs less or equal to the annual contribution limit. 

Jack and Diane can use these funds to pay for the [qualified medical expenses](https://livelyme.com/whats-eligible/) of those covered under their health plan, including each other.

#### Family HSA contribution limit with one account

The other option is to have the entire amount of the HSA in one account holder’s name. In this case, Jack opts not to contribute anything into his HSA for the year, and Diane and her employer will be able to contribute the entire amount into her account.

## The benefits of an HSA

![hsa-retirement-benefits](//images.ctfassets.net/6j8y907dne6i/1okT5ICuYiKx6c18Oof9dK/0e331b4135f6588ed8df49e0f2a24bdd/hsa-retirement-benefits.jpg)

There are four primary [benefits of having an HSA](https://livelyme.com/blog/what-are-the-benefits-of-an-health-savings-account/).

1. __Three levels of tax savings__. Pre-tax or tax-deductible contributions. Tax-free interest, and investment earnings. And tax-free withdrawals when used for qualifying medical expenses.
2. __Portability__. HSAs aren’t tied to your employer. If you decide to move to a different company or retire, your HSA stays yours. The funds added to your account stay there until you choose to withdraw or roll it over; like a 401(k).
3. __ A safety net in the event of a health-related emergency__. An HSA helps you save for the unknown. It can be used for unexpected health care expenses or health insurance if you’re between jobs. An HSA covers all qualified medical expenses, even after a change of plans or providers.
4. __ Flexibility in retirement__. When you turn 65, your HSA can be used for non-health-related expenses without penalties; like a 401(k), or IRA.

An HSA is a great safety net in the event of a health-related emergency. And with [options to invest](https://livelyme.com/blog/can-i-invest-my-hsa-money/), choosing to open an HSA is one of the best financial choices you can make for you and your family. 

To learn more, or to open an HSA, [get in touch](https://livelyme.com/features/) with us at Lively.


family hsa and individual hsa contributions are dependent on health care coverage

family-hsa-vs-individual-hsa

Learn the differences between a Family HSA vs Individual HSA. And how to extend HSA benefits to your entire family. 

Family HSA vs Individual: What’s the Difference?

What’s the Difference between a Family and an Individual Health Savings Account?

Dividing your assets, such as 401(k)s and Health Savings Accounts (HSAs) is a central piece of negotiating a divorce settlement. If you receive health insurance through your spouse’s employer, you want to carefully consider whether it makes sense to stay on your partner’s health insurance after you divorce.

## Tips for navigating health insurance when divorcing

### You can pay for health insurance through an ex’s health insurance.

If your health insurance was through your partner’s workplace plan, you may be able to stay on the plan for up to 36 months. The federal COBRA legislation requires any firm or organization with at least 20 employees to offer health insurance to the divorced partner. If your soon-to-be-ex works for a smaller employer, you may be eligible for extended COBRA coverage through a state-run plan.

But there’s a big expensive catch to COBRA health insurance coverage: Once you are divorced, the employer no longer will subsidize the premium cost for the non-employee. 

You will be required to pay the full cost. According to the Kaiser Family Foundation, the average monthly premium for single coverage through a group plan was nearly $7,200 in 2019.  And the employer is also allowed to tack on an additional 2% annual fee to cover administrative charges.

### Check out your employer’s health insurance. 

If you were on your partner’s plan because it was more robust or cost-effective than the plan offered by your employer, time to circle back to your workplace plan. It may now be more cost-effective than staying on your ex’s plan through COBRA. 

Getting divorced is considered a [qualifying life event](https://livelyme.com/life-events-that-can-change-your-healthcare-costs), so you’ll be able to enroll for health insurance outside of open enrollment. 

### Compare COBRA coverage to an ACA-marketplace plan.

Before you finalize your divorce, spend some time pricing out purchasing your own health insurance through the ACA marketplace. Depending on your income you may be eligible for subsidies. You can start your search at the [healthcare.gov](https://www.healthcare.gov/) website.

### Include the cost of paying for health insurance in your divorce negotiations. 

It’s likely that whatever health insurance solution you land on, the premium is going to be a sizable line-item cost in your monthly budget. You should factor that into negotiations for assets. And keep in mind that if there is a family HSA account that has a sizable balance, that is a valuable asset to also bring into your discussions. 

### Consider a legal separation as a temporary step. 

If you are legally separated, but not divorced, you may be able to stay on a spouse’s plan, but it varies by employer and insurer.

### Sort out who pays for insurance coverage of the kids.

This is obviously a key part of your divorce negotiation. If you opt for joint custody and you both assume responsibility for health insurance, the spouse whose birthday falls earlier in the calendar year will have the “primary” insurance for the children. If there isn’t joint custody, the custodial parent typically assumes responsibility for health insurance for children. If the custodial parent remarries, and doesn’t have health insurance, the responsibility can fall to the custodial parent’s new spouse. If that isn’t an option the non-custodial parent will be required to step in and provide health insurance coverage.

Given the complexity of divorce, including health insurance coverage. consulting with a lawyer experienced in divorce law is a smart move to ensure that everyone in the family is covered. 



stay-on-insurance-divorce

Divorce is a complicated process - and it doesn't help that your health insurance gets tied up into the process as well. We detail some information that you will need to know regarding your healthcare if you are getting divorced from your partner.

How Long Can I Stay on My Partner's Insurance After a Divorce? 

<p>Helping employees understand the benefits of an HSA (like any new HSA user), takes time and resources. In order to make the HSA education and engagement process easier for employers and employees, we have outlined our best practices.</p>
<p></p>
<p>Our employee HSA education guide will help you get HSA strategies&nbsp;in place from day 1 so employees can take advantage of the&nbsp;<a href="https://livelyme.com/what-are-the-benefits-of-an-health-savings-account/">triple-tax benefits</a>&nbsp;immediately.</p>
<h2>HSA Employee Education Tips</h2>
<p>Opening, establishing and contributing to an HSA should be easy.&nbsp;It shouldn&#8217;t be rocket science, that&#8217;s at least what we think at Lively! Here is what every employee needs to know to get started with their new HSA:</p>
<ol>
<li>Confirm&nbsp;<a href="https://livelyme.com/hsa-eligibility-details/">HSA-Eligibility</a></li>
<li>Understand&nbsp;<a href="https://livelyme.com/2018-hsa-contributions/">Contributions&nbsp;Limits</a></li>
<li><a href="https://livelyme.com/add-1-hsa-day-1/">Open and Establish their HSA</a></li>
<li>How to&nbsp;<a href="https://livelyme.com/hsa-rollovers-and-transfers/">Rollover or&nbsp;Transfer</a>&nbsp;an Existing HSA</li>
<li><a href="https://livelyme.com/set-forget-hsa/">Automating HSA Contributions</a></li>
<li>Use an HSA&nbsp;<a href="https://livelyme.com/hsa-debit-card/">Debit Card</a>&nbsp;for Eligible&nbsp;Purchases</li>
<li>Review&nbsp;<a href="https://livelyme.com/can-i-invest-my-hsa-money/">HSA Investment</a>&nbsp;Options</li>
</ol>
<p>No employer health or financial situation is the same. Once employees have opened&nbsp;an HSA, customizing&nbsp;HSA strategies can help each and every eligible employee take advantage of their HSA benefits. This will better ensure success (and renewal). Let&#8217;s look at two likely employee HSA scenarios:</p>
<ul>
<li><b>HSA Saver</b>&nbsp;&#8211; HSA savers are more focused on the long-term savings value of an HSA. They can invest their funds or simply take advantage of FDIC-Insured interest bearing&nbsp;HSA accounts. Thereby taking advantage of compound interest and save HSA funds for future health costs.</li>
<li><b>HSA Spender</b>&nbsp;&#8211; These employees are using pre-tax HSA funds to pay for expected and unexpected health costs. They can use their dedicated HSA funds to reduce their out-of-pocket health expense liability.</li>
</ul>
<p>Many HSA account holders are a mix of both. Helping employees save for health costs today and plan for anticipated health costs well into retirement will only increase HSA adoption.</p>
<h4>Employee Engagement and Support</h4>
<p>Things come up. Employees get stuck. We get it. We have&nbsp;been through it ourselves. Making sure on-demand support options are available for employees is crucial in this process. It saves everyone time. Employee HSA education is an ongoing process. So we created an on-demand resource center to help &#8211; from an&nbsp;<a href="http://support.livelyme.com/">HSA FAQs</a>&nbsp;to&nbsp;<a href="https://livelyme.com/calculator/">HSA saving calculators</a>. We backed it all up with a dedicated&nbsp;customer&nbsp;service team to answer employee&nbsp;questions via&nbsp;<a href="mailto:support@livelyme.com">email,</a>&nbsp;<a href="tel:1-888-576-4837">phone</a>&nbsp;or chat (via our website).</p>
<h4>Don&#8217;t&nbsp;Forget! Talk About Retirement &amp; Health Costs</h4>
<p>Many employees are stuck on a year-to-year&nbsp;ferris&nbsp;wheel when it comes to health insurance and cost planning. Employees are forced into rising yearly health insurance premiums and out-of-pocket costs. Not planning for health costs in retirement &#8211; which are&nbsp;<a href="https://www.cnbc.com/2017/11/24/health-care-costs-in-retirement-can-top-275000.html">expected to exceed&nbsp;$275,000 per couple</a>&nbsp;&#8211; can be a financial mistake. Employees can use their HSA to plan and save for retirement. In fact, an HSA might be the&nbsp;<a href="https://livelyme.com/stealth-ira/">new stealth IRA</a>.</p>
<p>Opening an HSA is easy (at least at Lively). Helping employees understand the value of an HSA should be too. Use this employee HSA guide&nbsp;to fast-track benefits education to save employees time.</p>

Employee-HSA-Guide.jpg

Helping employees understand the benefits of an HSA (like any new HSA users), takes time and resources. In order to make the HSA education and engagement process easier for employers and employees, we have outlined our best practices.

Employee HSA Guide

Lively Blog

What is an HSA?

How Do I Qualify for an HSA?

How Does a Health Savings Account Work?

How Much Can I Contribute to My HSA?

What Can I Use a Health Savings Account For?

It’s a fact. The cost to be - and stay - healthy rises each year. And even the comprehensive  (expensive) health insurance plans are covering less for the cost of care. So what’s a person to do? Open an HSA.

A Health Savings Account (HSA) allows you to set aside money on a pre-tax basis to pay for qualified medical expenses. You, your employer, and even friends and family can contribute money to your HSA. The contributions are tax-deductible and never expire. So you can save them for a rainy day, retirement, or to help pay for an expensive procedure you have coming up.

## How do I qualify for an HSA?

To qualify for opening and contributing to an HSA, you must meet these criteria:

1. You must enroll in a [High-Deductible Health Plan](https://livelyme.com/guides/hdhp/) (HDHP). 
2. You can’t have any other supplemental health insurance coverage. Meaning, you can’t be covered under your spouse’s health insurance plan too.
3. You must not be eligible for or enrolled in Medicare.
4. You must be under the age of 65.
5. You can’t contribute to a [Health Flexible Spending Account](https://livelyme.com/blog/what-is-a-healthcare-fsa/) (HFSA). But you can contribute to a [Dependent Care](https://livelyme.com/blog/dependent-care-fsa-dcfsa-work/) (DCFSA) or [Limited-Purpose FSA](https://livelyme.com/blog/what-is-a-limited-purpose-fsa/) (LPFSA) and contribute to a health savings account in the same year.

## How to enroll and use an HSA

![how-does-health-savings-account-work](//images.ctfassets.net/6j8y907dne6i/3zynuAFE9SoOfJRy8MT7lO/d0078bf16189f8141aeeaa5b7ae1da54/how-does-health-savings-account-work.jpg)

### Step 1: Elect a high-deductible health plan during open enrollment.

![Infographic High Deductible Health Plan plus HSA how you save](//images.contentful.com/6j8y907dne6i/5lcCeg9CA7pfdV9jfLrUVG/86661d1a0187b5c1f8408c52a5247e9f/Infographic_HealthPlan_plus_HSA_HORIZ.png)

### Step 2: Open a health savings account and decide how much you want to contribute. 

To enroll in an employer-sponsored health savings account, you'll likely open your HSA during open enrollment. Let your employer know how much you want to contribute for the year up to the [IRS contribution limit](https://livelyme.com/blog/hsa-contribution-limits/), which are different whether you are an individual, family, and/or over 55. Your employer may begin making payroll deductions each month.

Your employer may choose to contribute to your HSA. But they’re not required to. If they do, those contributions will count toward your annual limit. But will remain tax-free to you.

![Infographic how money goes into your HSA](//images.contentful.com/6j8y907dne6i/5qd6V0TtmmbBHgwTvMuTHh/f26f8ca95dd89fa960804adbe80616d6/Infographic_Money_In_HORIZ.png)

Maybe your employer doesn’t offer a health savings account. Or it’s outside of open enrollment and you want to get started on saving for your health care costs today. You can open an HSA with a financial institution in the private market.

With this route, you will make arrangements to fund your HSA with the account administrator. And your contributions will be deducted from your gross taxable income when you pay taxes for that year.

### Step 3: Use your funds for qualified medical expenses.

To use your funds, your account administrator may provide a debit card so you can pay for your health care costs at the point of sale. Or you will pay for costs upfront and submit documentation for [reimbursement](https://livelyme.com/blog/hsa-reimbursement-rules/). Your withdrawals are tax-free as long as you use the money to pay for qualified medical expenses. If you use your money for something else, the money you withdrew will be subject to income tax plus a 20% penalty.

![HSA infographic how money comes out of HSA](//images.ctfassets.net/6j8y907dne6i/4ASMR4GJB8EGJoXPtGWqLj/d6a2d0cf2f363b57abaa037e62026a55/Infographic_Money_Out_HORIZ.png)

__Additional health savings account details:__

- You own your account so you can take it with you from employer-to-employer (or employer to unemployed). 
- Even if you choose a health insurance plan that isn’t an HDHP, you can still use past contributions for out-of-pocket, qualified medical expenses. But you won’t be able to contribute to your account.
- Employer contributions are tax-free.
- If you’re under the age of 65, you must use your contributions for qualified medical expenses.
- Once you reach 65, you can no longer contribute to your account. But you can use your savings to pay for whatever you’d like.  
- An HSA offers triple tax savings: pre-tax or tax-deductible contributions, tax-free interest and investment earnings, and tax-free distributions when used for qualified medical expenses.

## What can I use my funds for?

![hsa-eligible-expenses](//images.ctfassets.net/6j8y907dne6i/42Oe00AuAcE2fs9KFkcmHS/b30013424117eb2a8c42b7c42b094e5c/hsa-eligible-expenses.jpg)

HSA-eligible expenses include (but are not limited to):

- Deductibles
- Copays
- Coinsurance
- Out-of-pocket costs related to diagnostic services like x-rays and blood tests
- Prescriptions
- Quality of life enhancers like air purifiers (with a letter of medical need)
- Medical supplies like band-aids and crutches
- Alternative medicine treatments like acupuncture

This list is not exhaustive. For a comprehensive list of IRS-qualified medical expenses check [“What’s Eligible."](https://livelyme.com/whats-eligible/)

## What happens if I switch employers?

You get to keep your account and every dollar you’ve saved. Although you may not be able to continue contributing to that same account. 

If your new employer uses a different health savings account administrator, you will have two options. [Roll the HSA](https://livelyme.com/blog/rolling-over-your-hsa/) from your previous employer into the new account or maintain two different HSAs. One account from your previous employer - from which you can withdraw but not contribute. And one from your current employer into which you can start contributing.

For more details about your specific situation, contact your HR department.

## Where can I sign up for a Health Savings Account?

![sign-up-lively-hsa](//images.ctfassets.net/6j8y907dne6i/4sUTWDriKFMgGBrIHxeyH9/a36ee79d497005f21445666727ab98e6/sign-up-lively-hsa.jpg)

You can [sign up for an HSA](https://secure.livelyme.com/signup/start) in two places. Through your employer, if it offers this benefit. Or through a financial institution in the private market.

Here, at [Lively](https://livelyme.com/), we offer a private-market HSA that allows you to put your contributions into mutual funds or other investments. That way you can access an even greater benefit: growing your money with the market.

As you can see, there are many ways an HSA can help you save money for health care expenses and retirement. A health savings account can also offer security should you lose your health insurance coverage for a period of time. For more information about HSAs, check out our [HSA Guide](https://livelyme.com/guides/hsa-guide/).


what-is-hsa

Learn the basics of an HSA, including the qualifications for opening and contributing to an account, how much you can contribute, how to use your account, and more!

HSA Basics: Qualifications, Contributions, and More | Lively

The Basics of HSAs: Qualifications, Uses, and More

In a world of text, chat and email it can feel like everything is (or has) an acronym. Health insurance plans are no exception. You may have come across the acronym HDHP and are wondering "What is a High Deductible Health Plan (HDHP)?" Continue reading to learn how choosing an HDHP could benefit you. Provided it gives you the coverage you need.

To start, an HDHP is a health insurance plan defined by lower premiums and a higher deductible. But don't let "higher deductible" scare you off. Here are two reasons why an HDHP could make sense for you:

1. All preventative care is covered before the deductible, and
2. HDHPs are an affordable way to get the coverage you need without paying more for extras you may not need.

HDHPs are also the only health insurance option that can be paired with a Health Savings Account (HSA). An HSA can help pay for the high-deductible or to save money for future medical costs.

<iframe src="https://player.vimeo.com/video/377355900" width="640" height="360" frameborder="0" allow="autoplay; fullscreen" allowfullscreen></iframe>

## What is considered eligible?

Annually, the IRS redefines what it considers an HDHP (adjusting for inflation). In 2022, their parameters were a [health plan](https://livelyme.com/guides/hsa-guide/) with a deductible of at least $1,400 for an individual and $2,800 for a family. As well as out-of-pocket expenses that didn’t exceed $7,050 for an individual and $14,100 for a family.

In 2023, the minimum deductibles and out-of-pocket maximums will rise. For individuals the minimum deductible will be $1,500 for individuals and $3,000 for families. The maximum out-of-pocket limits will rise to $7,500 for an individual and $15,000 for a family.

There's one other qualifying characteristic of HDHPs. The individual pays for the cost of healthcare, up to the deductible, before insurance pays for services. The one caveat here is preventative care. All preventative care is covered before the deductible.

## How do they work?

![preventative-care-included-hdhp](//images.ctfassets.net/6j8y907dne6i/5j1glZm5E5y47Fi5eW2T2K/1ebc0d46beb92be8021d514656948957/preventative-care-included-hdhp.jpg)

HDHPs charge participants lower monthly premiums. This is in exchange for requiring higher deductibles and out-of-pocket maximums.

Choosing an HDHP could make sense if you don't need many health care items or services. Or if you only visit the doctor for preventative care. This is because you'll be spending less on your monthly [health insurance plan](https://livelyme.com/compare-health-insurance-plans/) premium. An HDHP could also make sense if you need more care. Here's why.

Because HDHPs have a higher deductible, the IRS allows you to [deposit pre-tax money into a savings account](https://livelyme.com/blog/what-is-an-hsa/) called an HSA or Health Savings Account. HSAs are tax-advantaged accounts because contributions are pre-tax.

![Infographic High Deductible Health Plan plus HSA how you save](//images.ctfassets.net/6j8y907dne6i/5lcCeg9CA7pfdV9jfLrUVG/86661d1a0187b5c1f8408c52a5247e9f/Infographic_HealthPlan_plus_HSA_HORIZ.png)

The distributions and any gains those contributions make can also be tax-free. That's as long as the contributions are used to pay down your deductible or to pay for other qualified medical expenses. Depending on your tax bracket, this could help you save up to 30% on medical expenses.

Where an HDHP could get you into trouble is if you suffer a catastrophic event that requires an expensive procedure or treatment. And you can’t afford the out-of-pocket maximum. Or if you have or develop a chronic condition that needs management.

__Decide which plan is right for you with our [Health Plan Comparison Calculator](https://livelyme.com/compare-health-insurance-plans/).__

To choose an HDHP, you would make the election during the open enrollment period for either your place of employment or in the private market. The other time is after a [Qualifying Life Event](https://livelyme.com/blog/when-should-i-consider-changing-my-health-plan/). If you’ve experienced a life event like the loss of health insurance, marriage, the birth of a child, or death of a dependent, you can sign up for an HDHP at any time during the year with a special enrollment period.

## What are the benefits?

![high-deductible-health-plans-lower-premium](//images.ctfassets.net/6j8y907dne6i/45YNFcVTSqOIH1GiPuzUVQ/150ddbbe5981bcf60c7150e50f13f6d1/high-deductible-health-plans-lower-premium.jpg)

Whether you’re considering an HDHP or have been using one for years, there’s no question that higher deductibles are a tough pill to swallow. The good news is, this type of health plan does offer some unique flexibility and opportunities that other health insurance plans lack.

1. __Flexibility__ – HMO health insurance plans require referrals from a primary care physician. This can be extremely frustrating for individuals who need to have some kind of care outside of a general practitioner. While HDHPs still have in and out of network designations, the list of in-network providers is extensive. And you can see a dermatologist, cardiologist, or other specialists even if you haven’t yet designated a primary care physician.
2. __Lower cost__ – The problem with large, overarching health plans is they try to cover everyone. This might sound good on paper, but not in practice. This often leads to people with low health care needs paying more to cover people with high health care needs. HDHPs reward limited use of the medical system by charging participants low monthly premiums. While also covering preventative care before the deductible is met.
3. __Health savings for the long term__ – HDHPs are the only health insurance plan that you can pair with an HSA. You own the contributions both you and your employer make to your HSA. And they never expire. The funds can be saved or invested in stocks and mutual funds, making these accounts function as a medical safety net. This is beneficial if you lose your employment or your employer changes your health insurance options. Or if your health insurance company decides to discontinue the plan you’re on, or you experience a catastrophic event. Any of which could leave you scrambling to cover unexpected medical expenses. And in the event you don’t spend your contributions before the age of 65, you can use that money, tax-free, for any expenses. Just like another retirement account. 

## Is this plan right for me?

![is-hdhp-right-for-me](//images.ctfassets.net/6j8y907dne6i/1lGHA7VDq1QmkbEHtrozbq/8ce9096c3149cd21eca124e9fb2a5cf3/is-hdhp-right-for-me.jpg)

*The right health insurance plan for you lies at the nexus of affordability and appropriate coverage.* You must be able to afford the monthly premium but also the annual out-of-pocket maximum in case you experience a catastrophic event.

The plan must also provide adequate coverage for your current medical needs. As well as those in the foreseeable future (e.g. having a baby, knee surgery, etc.). Inadequate coverage could cause your out-of-pocket expenses to get out of hand quickly.

So take a look at the specifics for the HDHP you’re being offered. Can you afford that monthly premium? If yes, then take a look at what procedures, treatments, and prescriptions are covered and at what levels. When taking coverage levels into account, can you afford the copays, co-insurance, and other out-of-pocket costs?

Do you have the ability to contribute even a small amount to an HSA? Something to remember about HSAs is the money is contributed pre-tax. That means you could end up saving up to 30% on medical expenses depending on your income taxes bracket.

If, after answering these questions, an HDHP looks like it makes financial sense, then it could be the right plan for you. If you have questions about your specific situation, you should always reach out to your HR department.

HDHPs are often thought of as an [affordable health insurance option](https://livelyme.com/guides/hdhp/), especially for the healthy or if you know you’ll exceed your out-of-pocket maximum. Combine an HDHP's monthly affordability with the option to pair the plan with an HSA, and you have an attractive setup. Not only for those who have limited medical care needs but those who can afford to contribute a little extra each month toward future costs and savings. 

discover "what is a high deductible health plan?"

what-is-a-high-deductible-health-plan

Discover how an HDHP works, its benefits, and if one is right for you. Pair your Lively HSA with a qualified high deductible health plan to start saving today.

Your Crash Course in High-Deductible Health Plans

Understanding High Deductible Health Plans

You’ve heard about HSAs and FSAs. And you think they are a good way to save money for and on medical expenses. And your employer offers both as part of its benefits plan. 

You’re in luck. You get to choose the option best suited to your needs. And yes, you do have to choose. Because you can’t contribute to an HSA and a Healthcare FSA at the same time. Let’s discover which account type will win in HSA versus FSA.

So how do you choose? To make the best decision for you and your family, consider the details of each account. And compare those to the realities of your family’s medical and financial needs.

## HSA vs. FSA Basics

There are some basic facts you need to know to understand the differences between FSAs and HSAs. 

To start, let's look at what these accounts have in common.

Health Savings Accounts (HSA) and Healthcare Flexible Spending Accounts (FSA) are pre-tax accounts. And are both used to pay for qualified, out-of-pocket medical expenses. These include, but aren’t limited to, copays, deductibles, coinsurance, and prescriptions. Because contributions are pre-tax, you can save up to 30% on those out-of-pocket expenses. Depending on your tax bracket.

How are HSAs and FSAs different? The [major difference](https://livelyme.com/blog/differences-between-hsa-vs-healthcare-fsa-infographic/) they have is that an FSA is an employer owned account that pays for short-term expenses. You must use up the FSA funds you contributed by the end of the year.

HSAs are individually owned, and you can use them for short-term expenses, or long-term savings, like retirement. In addition, account functionality and account holder requirements are different for the two account types. 

Let’s learn a little more about each account type.

## What is a Health Savings Account?

![how-to-choose-between-hsa-fsa](//images.ctfassets.net/6j8y907dne6i/1JfvzE56bAaAExlGqDmfjd/eafd5bc19e833ef342e4349e4eb6f630/how-to-choose-between-hsa-fsa.jpg)

A Health Savings Account is a kind of savings account that allows you to [save for health care costs](https://livelyme.com/blog/what-is-an-hsa/). And reduce your taxable income. In other words, HSAs are individually owned, tax-advantaged medical savings accounts. You can open one as an individual or as part of a family plan. As long as you and your family are enrolled in an HSA-eligible [High Deductible Health Plan](https://livelyme.com/blog/what-is-a-high-deductible-health-plan-hdhp/) (HDHP).

### What’s considered an HSA-eligible health plan?

HDHPs are [health plans](https://livelyme.com/guides/hsa-guide#qualifying-for-an-hsa-account/) with a minimum deductible and maximum out-of-pocket expenses set by the IRS that differs for individuals and families.

The IRS adjusts its allowed annual [HSA contribution limits annually](https://livelyme.com/blog/hsa-contribution-limits/) for inflation, and has different limits for individual and family accounts. If you have a [mid-year change](https://livelyme.com/blog/hsa-contribution-limits-mid-year-changes/) – like moving from self-only coverage to family coverage, or vice versa, then your annual contribution limit becomes prorated.

### How does an HSA work?

When you open your HSA, you choose how much you’d like to contribute annually. Then, your employer will deduct the appropriate amount from each paycheck. Your employer may choose to also contribute to your account. But they’re not required to.

If they do contribute, those contributions will count toward your [maximum annual limit](https://livelyme.com/guides/hsa-guide#maximizing-your-savings). Choose your individual contribution amount carefully. And keep in mind that contributions are cumulative. Otherwise, you could end up going over the annual contribution limit.

If you’re under the age of 65, you must use your contributions to pay for qualified medical expenses. These include, but are not limited to:

- Copays
- Coinsurance
- Deductibles
- Acupuncture
- Mental health treatment
- Prescriptions
- Medical supplies like [bandages](https://hsastore.com/SearchProducts.aspx?q=band+aid&utm_source=Lively&utm_medium=TPA+Public+Proprietary+EL&utm_campaign=TPA+Partner), [crutches](https://hsastore.com/SearchProducts.aspx?q=crutches&utm_source=Lively&utm_medium=TPA+Public+Proprietary+EL&utm_campaign=TPA+Partner), [joint braces](https://hsastore.com/SearchProducts.aspx?q=braces&utm_source=Lively&utm_medium=TPA+Public+Proprietary+EL&utm_campaign=TPA+Partner), and more
- Hearing aids
- Dental health
- Vision tests

Want to see the full list of HSA-eligible expenses? Visit [What’s Eligible?](https://livelyme.com/whats-eligible/)

### How age affects HSA use and taxes

![age-affects-hsa-taxes](//images.ctfassets.net/6j8y907dne6i/1mxiaR9se6IhBYokKGgsdd/86de5569ecab00a84ae82f763e30789e/age-affects-hsa-taxes.jpg)

If you’re under the age of 65 and use your contributions for qualified medical expenses, those funds are not subject to federal income tax. But, your state tax liability for contributions depends on your state.

If you choose to use the money for something other than qualified medical expenses, you will incur a 20% tax penalty. And have to pay income taxes on the misused money. After age 65, you can use your health savings on anything you want provided income tax is paid on the amount of the non-qualified disbursement.

## What is a Flexible Spending Account (FSA)?

There is only one type of HSA, and its main use is to pay for qualified medical costs at any age. 

There are three types of FSAs: 

- [Healthcare FSA](https://livelyme.com/blog/what-is-a-healthcare-fsa/)
- [Dependent Care FSA](https://livelyme.com/blog/what-is-a-dependent-care-fsa/)
- [Limited Purpose FSA](https://livelyme.com/blog/what-is-a-limited-purpose-fsa/)

When people use the term “FSA,” they are most often talking about a [Healthcare FSA](https://livelyme.com/blog/what-is-a-healthcare-fsa/), which is a spending account your employer makes available to pay for qualified medical expenses with pre-tax dollars. HDependent Care FSAs are for qualified care expenses, like child or adult daycare. Limited Purpose FSAs are only used for qualified dental and vision expenses. 

The most important thing to remember is that you cannot contribute to a Healthcare FSA or Dependent Care FSA and an HSA at the same time. But you can have a Limited Purpose FSA and an HSA at the same time. 

### How does a Healthcare FSA work?

If you decide you would like to open an FSA, the good news is that you don’t have to purchase a specific health plan. In fact, you don’t have to purchase any health plan.

But you must elect to participate during your employer’s open enrollment period. Or within 30 days of starting employment if you begin your job mid-year. Then, you select the amount you would like to contribute to your account at that time. Your employer will then deduct the appropriate amount from each paycheck.

Your employer can choose to contribute to your FSA but is not required to do so. And their contributions don’t count toward your annual max. Unfortunately, you can’t change this election at any point outside of open enrollment. Unless you’ve experienced a [qualifying life event](https://www.healthcare.gov/glossary/qualifying-life-event/) like the birth of a child, death of a dependent, marriage, or divorce. 

![qualifying-life-event-fsa-contribution-amount](//images.ctfassets.net/6j8y907dne6i/td25GiIFP70vewqfrlrSD/751854829eee489fc8a0c81fddb11efb/qualifying-life-event-fsa-contribution-amount.jpg)

You also lose any unused money at the end of the year. Unless your employer offers either the option to [rollover a small amount of funds](https://livelyme.com/blog/fsa-contribution-limits/) to next year’s account or a 2.5 month grace period during which you can use leftover funds. So choose your contribution amount carefully.

Like with HSAs, the IRS imposes [an annual limit on FSA contributions](https://livelyme.com/blog/fsa-contribution-limits/) that adjusts annually for inflation. Unlike HSAs, FSAs are only opened on an individual basis, so there are no “family plan” increases for annual contribution limits. But if both you and your spouse are offered the opportunity to take part in an FSA at work, you can do so and each can contribute up to the maximum allowed amount.

FSA funds can be used to pay for out-of-pocket medical, vision, and dental expenses not covered by your health insurance plan. Including, but not limited to:

- Copays
- Coinsurance
- Deductibles
- Acupuncture
- Mental health treatment
- Prescriptions
- Medical supplies like [bandages](https://fsastore.com/SearchProducts.aspx?q=bandages&utm_source=Lively&utm_medium=TPA+Public+Proprietary+EL&utm_campaign=TPA+Partner), [crutches](https://fsastore.com/SearchProducts.aspx?q=crutches&utm_source=Lively&utm_medium=TPA+Public+Proprietary+EL&utm_campaign=TPA+Partner), [joint braces](https://fsastore.com/SearchProducts.aspx?q=joint%20braces&utm_source=Lively&utm_medium=TPA+Public+Proprietary+EL&utm_campaign=TPA+Partner), and more
- Hearing aids
- Dental health
- Vision tests

For a full list of medical expenses that you can use your FSA (or HSA funds) on, check out [Publication 502](https://www.irs.gov/forms-pubs/about-publication-502) from the IRS. You can also visit the [FSA Store](https://fsastore.com/?utm_source=Lively&utm_medium=TPA+Public+Proprietary+EL&utm_campaign=TPA+Partner).

## The differences between HSAs and FSAs

![choose-between-hsa-fsa](//images.ctfassets.net/6j8y907dne6i/EqKcpDQS9JGMip8psYcVj/994cea7acae40c6fc14eecff7688fdfc/choose-between-hsa-fsa.jpg)

### Eligibilty requirements

- __FSA:__ Only employers can establish an FSA plan for employees to contribute. Employees can open an FSA regardless of if they have a HDHP or not. Self-employed individuals cannot open an account.
- __HSA:__ Employees are eligible only if they have an [HSA-eligible HDHP](https://livelyme.com/guides/hsa-guide#qualifying-for-an-hsa-account). Individuals are not dependent upon their employer to offer an HSA. And an HSA can be opened from the private market. Self-employed individuals can open an account.

### Contribution sources and changes

- __FSA:__ The contribution amount is chosen during open enrollment or at the time of a qualifying life event. And the contribution amount can not be changed outside of these two time periods.
- __HSA:__ You can change your contribution amount at any time, no major life event required. This gives you the flexibility to increase or decrease your contribution at any time. *__Multiple contribution sources:__* You can grow your HSA in multiple ways. Not only can you add money to your HSA, but your employer, relatives, or anyone who would like to contribute can help your HSA grow.

### Rollover rules

- __FSA:__ Employers choose whether an employee can keep their unused funds or not. There are [three options](https://livelyme.com/blog/fsa-rollover-versus-grace-period/): *__Forfeit__*: Employee forfeits money, and employers get to keep it. *__Grace period__*: Employee has a 2.5 month grace period after the plan year ends to use on expenses. Any remaining money after the grace period is employer’s. *__Carryover__*: Employees can add a small amount of unsued funds, [set each year by the IRS](https://livelyme.com/blog/fsa-contribution-limits/) (in addition to contribution limit). Employers decide the carryover limit, and any funds over the limit are the employer’s.
- __HSA:__ Funds do not expire from year-to-year. Rollover money is in addition to the contribution limits. Money in your HSA can be carried with you and is available even if you change health insurance plans, get a new job, or retire. And funds left in your account grow tax-free through interest or any investment gains.

### Account ownership

- __FSA__: An FSA is owned by the employer. Unused funds belong to employers, not the employee.
- __HSA__: Funds stay with you. One of the best perks of an HSA is that the money you save always stays with you because you own the account. If money is left in your HSA at the end of the year, it stays put. No scrambling around trying to find ways to spend the money before the timer runs out.

### Access to money

![accessing-hsa-fsa-contributions](//images.ctfassets.net/6j8y907dne6i/4lJ6EN6128M5SHmAuh8hzk/60301225072d2cec1be8a6e2fda926ca/accessing-hsa-fsa-contributions.jpg)

- __FSA:__ Money available from day one. Every penny you contribute to your FSA is available at the beginning of the benefit year. Or shortly after the first contribution is made. Say you add $2,000 to your FSA for the year, you’ll likely contribute about $80 per paycheck. Yet, the entire $2,000 is available to use at any time even though you only make small contributions during the year. Another perk? If you leave a position before the year is over, the money spent from your FSA doesn’t have to be paid back.
- __HSA:__ As the employee contributes to their plan. An employee only has access to what has actually been deposited into their HSA account.

### HSA: A savings asset

- *__After the age of 65, your HSA functions like any other retirement account.__* And you can use your HSA money on anything you wish. How does it differ from other retirement accounts? You don’t pay income taxes on money used for medical expenses. You do, however pay income taxes on money used for anything else.
- *__HSAs are assets you can pass on to your kin:__* If your spouse inherits the HSA, it retains its status as a retirement-like account. With the same rules and allowances as it had when you were the account holder. If you pass it on to someone other than your spouse, it stops being an HSA, and inheritance laws apply.

## Understand the pros and cons to find what’s best for you

![is-hsa-fsa-better](//images.ctfassets.net/6j8y907dne6i/7dkm3u9Ez0B7z6r7ZndKdK/d746299a286d54387aae669880b9cbb2/is-hsa-fsa-better.jpg)

While it’s likely you’ll only be eligible for either a Healthcare FSA or an HSA, it is still a good idea to take a look at the pros and cons of both types of accounts. This can help you understand how they align with your greater financial goals and help you decide what healthplan to choose.

### HSA Advantages

- __Portable account__: means you own the account and don’t lose it if you change jobs
- __Triple-tax advantage__: Contribute funds pre-tax, funds grow pre-tax, withdraw funds pre-tax for qualified expenses
- __No use-it-or-lose-it rules__: Spend now or save for retirement.
- __Anybody can contribute to your HSA__: This includes your employer, spouse, family, or friends, as long as you don’t go over the annual contribution limit.

### HSA Disadvantages

- Must enroll in a HDHP and meet other qualifications to have one
- May be subject to fees from the provider
- If you use your HSA for non-qualified expenses over age 65 you'll owe an additional 20% tax penalty on top of any taxes due

### Healthcare FSA Advantages

- __Double tax savings__: Contribute funds pre-tax, withdraw funds pre-tax for qualified expenses
- __Health plan agnostic__: Can enroll in one if your employer offers it, do not need to have a specific type of health insurance plan

### Healthcare FSA Disadvantages

- Only available from an employer, can’t have one if you are self-employed
- Employer owned, means you lose the account if you change jobs
- Subject to use-it-or-lose-it rules, meaning you lose funds if you they are not used during the plan year

## Align Your Goals with Your Savings

Deciding between an HSA and FSA depends on your medical and financial needs. The principal requirement for an HSA is enrollment in an HDHP. And while preventative care is covered before the deductible under HDHPs, most other care is not. That means you will have to pay for your medical expenses for you and your family out-of-pocket until you reach your deductible.

An HSA-eligible HDHP makes the most sense in two cases. First, [if you or one of your family members](https://livelyme.com/features/) has a condition that needs managing by either a specialist or with speciality prescriptions or treatments. In this case, you’ll likely exceed the deductible and be able to use HSA funds to save up 30% on out-of-pocket medical costs.

Secondly, if you rarely use the medical system except for routine preventative care (that includes vaccines and well visits for children) and really want the ability to use your pre-tax account as an investment vehicle to save for retirement. Then, an HSA/HDHP arrangement may be the best choice for you.

To make the best decision for you and your family, start by assessing your past medical needs and those you can project. Then take a look at your finances. Choose the account and health insurance plan arrangement that sits at the nexus of best health coverage and account flexibility.

comparing hsa versus fsa

An HSA and FSA provide up to 30% savings on out-of-pocket healthcare expenses, but you can’t contribute to both. Let’s explore the pros and cons of each account.

HSA vs. FSA: How Do They Compare?

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

Finding the right health insurance plan for you can feel daunting. One of the questions you may be considering is whether you should get an HSA or PPO. The good news is that you might not have to choose at all. Here’s what you need to know about both and how you can utilize them to maximize your health savings.

## HSA vs PPO: Why not both?

Before we get into the details of each option, let’s clear something up. A Health Savings Account (HSA) is a [tax-advantaged account](https://livelyme.com/guides/hsa-guide/) that allows you to save for qualified medical expenses — it’s not a health insurance plan. 

On the other hand, a preferred provider organization (PPO) is a type of health insurance plan that provides access to health care in a certain way. 

In fact, you [can have a PPO plan and an HSA](https://livelyme.com/blog/can-an-hdhp-be-a-ppo/) at the same time. Here’s how they both work.

### Preferred Provider Organizations

A PPO refers to the network coverage your health plan gives you access to. If you get your healthcare with providers who are in the network of your healthcare plan, you pay less for healthcare than with providers outside the network. However, you may still get some coverage with out-of-network providers. 

One major benefit of a PPO is that you don’t have to get a referral from your primary care physician to visit with a specialist. Simply check if they’re in your plan’s network and book an appointment with them directly. 

The biggest competitor to PPOs are [HMOs (health maintenance organizations)](https://livelyme.com/blog/hmo-vs-hdhp/), which allow you to coordinate your healthcare with your primary care physician, but at the cost of having access to a smaller network of providers.

### Health Savings Accounts

An HSA is a type of health savings plan that allows you to set aside money to pay for medical costs, up to a [maximum each year](https://livelyme.com/blog/hsa-contribution-limits/) which is set by the IRS.

Contributions to an HSA are tax-deductible, and your earnings in the account grow tax-free. As long as you use the funds for eligible medical expenses, those distributions are tax-free, too — that’s what the experts call a triple tax advantage.

To be eligible to contribute to an HSA, you have to have a [high-deductible health plan (HDHP)](https://livelyme.com/guides/hdhp/), which has a deductible and out-of-pocket maximum that are higher than traditional health plans. In exchange, they charge lower monthly premiums. 

### Can you get an HSA on a PPO plan?

In a lot of the information you may find online, it can sound like HDHPs, PPOs and HMOs are all separate types of health plans. But [HDHPs are defined only by their deductibles and out-of-pocket maximums](https://livelyme.com/guides/hdhp/) and have nothing to do with your network of providers.

In fact, the beauty of all of it is that it’s possible for an HDHP to be on a PPO network. That’s not to say the two are synonymous, though. Many PPO plans have low deductibles and out-of-pocket maximums, which are usually paired with higher premiums. 

Because this can get confusing, we’ll use the term “typical plan” or “traditional plan” to refer to the low- deductible, high-premium plans you can get on a PPO or HMO network, and we’ll use HDHPs for HSA-eligible plans that you can also get on both networks.

Now, with that out of the way, let’s get to the heart of the matter. The question isn’t whether an HSA is better than a PPO. The question is really whether you want an HDHP that qualifies for an HSA or a low-deductible plan?

## What is an HDHP?

As previously discussed, a high-deductible health plan is one where you have higher deductibles and out-of-pocket maximums than traditional plans, but also lower premiums. 

The limits are [determined each year by the IRS](https://livelyme.com/guides/hdhp/). These figures are sometimes much higher than what you’ll find with a traditional health plan. But the option to contribute to an HSA helps soften the blow a bit, especially if you have a high income and can benefit greatly from the tax breaks HSAs provide.

An HDHP can also be a good choice if you don’t have a history of needing medical care often. While there is a risk of ending up with a higher payment in some circumstances, you’ll have the certainty of lower monthly payments.

## What do traditional PPO and HMO plans offer?

These traditional plans charge higher premiums than HSA-eligible plans, but they also have lower deductibles and out-of-pocket maximums. In fact, some PPO and HMO plans have no deductible at all. They’re great if regular office visits are part of your health regimen.

The difference between a PPO and an HMO is how the provider network works. With an HMO, you’ll deal with your primary doctor most of the time and need to get a referral if you want to see a specialist. A PPO, on the other hand, gives you options to see other doctors and specialists without needing to go through your primary care physician.

## Why should you get an HDHP?

The biggest benefit of an HDHP is that it gives you the option to contribute to an HSA. To give you an idea of the potential savings, let’s say you have a family plan and can contribute $7,200 this year. 

If your effective tax rate for the year is 15%, that contribution cut $1,080 off your tax bill for the year — of course, as long as you don’t use your HSA funds for ineligible expenses.

In addition to saving for upcoming health care costs, you can also use an HSA to save for retirement. Health care is one of the [most expensive aspects of retirement](https://livelyme.com/blog/retiring-how-much-you-will-actually-need-healthcare/), and is estimated to cost an average couple $300,000 to $400,000 to pay for it.

Even if you don’t want to use your HSA for medical expenses in retirement, you can take withdrawals without the typical 20% tax penalty once you reach age 65. That said, the distributions will be subject to income taxes.

HDHPs can also be good if you’re young or generally healthy and don’t expect to spend a lot on medical care throughout the year. Of course, there’s no guarantee you won’t need an expensive procedure or visit to the emergency room. 

Even with most doctor visits, you have to pay the full bill before your insurance coverage kicks in. As a result, HDHP plans are best if your risk tolerance is high. 

## Why should you get a traditional PPO or HMO plan?

A traditional health plan won’t give you access to an HSA. But it can be great if you expect to make regular doctor visits or to get medication frequently throughout the year.

Their lower deductibles mean you’ll hit your limit sooner, and your insurance coverage will kick in earlier. For instance, they’re great if you’re pregnant as you’ll be doing regular check-ups with your doctor while you’re expecting.

Also, it’s possible to get access to a Flexible Spending Account (FSA) with a traditional health plan. FSAs are [another type of health savings plan](https://livelyme.com/blog/hsas-vs-fsas/), but you can only contribute to one if your employer offers it as a benefit. 

FSAs have some of the same benefits as HSAs, including pre-tax contributions (not the same as deductible contributions, but it’s the same concept). Also, when you designate how much you want to contribute over the next plan year, you’ll receive that amount at the beginning of the year instead of waiting to build up the balance through your payroll deductions. 

The biggest drawback of an FSA is its use-it-or-lose-it provision. This means that if you don’t use all of the money you contributed during the plan year, you could lose the remaining balance. 

Employers are allowed to make some exceptions, such as giving you more time to incur qualified expenses or allowing you to carry over some of the balance into the new year. But that’s not guaranteed.

Also, your FSA stays with your employer, so if you get laid off or move to another employer, you lose the money you’ve saved.

## Pros and cons of HDHP plans

Before you pull the trigger on a new health insurance plan, it’s important to understand both the benefits and drawbacks. Here’s a summary of what you need to know about HDHPs. 

### Pros of HDHP plans
- You’ll pay lower premiums than with traditional plans.
- You can contribute to an HSA and enjoy the tax benefits.
- HSAs don’t have a use-it-or-lose-it provision like FSAs.
- HDHPs can also be PPOs and HMOs, giving you more flexibility with your options.

### Cons of HDHP plans
- Deductibles can be high, which can be a colossal financial setback if you’re unprepared.
- Even simple doctor visits can be a major expense, especially if they include tests and screenings.
- You may find it difficult to contribute to an HSA if your out-of-pocket expenses are high every month.

## Frequently asked questions

### Can I have an HSA and a PPO?

Yes! In fact, many HSA-eligible health care plans are part of PPO networks. However, not all PPO plans are HSA eligible. Check if your plan allows you to have an HSA when shopping around.

### Is it better to have an HSA or a PPO?

If you’ve come across this question online, it’s important to note that it’s misleading. HSAs are a form of savings account that you can get with some healthcare plans. PPOs refer to the network your health insurance gives you access to.

But people tend to associate HSAs with HDHPs. And they associate PPOs with low deductible plans. The truth is that you can get a PPO plan that’s also an HDHP and, therefore, eligible for an HSA.

Hence the correct question is: Is it better to have a high-deductible or low-deductible health plan? The answer: it depends. It depends on your risk tolerance, how often you expect to visit the doctor, and how much you can afford to save up.

For instance, if you’re young and healthy and don’t expect a lot of doctor visits, an HDHP is an excellent way to save on monthly premiums. It’s also important to consider how much you can actually contribute to an HSA, which determines your tax benefits.

On the flip side, if you’re older, pregnant or have pre-existing medical conditions that require you to need regular check-ups, a traditional health plan may be a better fit, even with higher premiums. 

Finally, just because you’re young and healthy, it doesn’t mean you won’t max out your deductible or out-of-pocket maximum. You’re essentially betting that you won’t have to spend more on out-of-pocket costs than what you’re saving by not choosing a traditional plan. As such, HDHPs are better for folks with high risk tolerance. 

### What’s the difference between HRA and HSA health insurance?

An [HRA (Health Reimbursement Arrangement)](https://livelyme.com/blog/what-is-an-hra/) has a similar premise to an HSA. It’s a savings account that you can use to reimburse medical expenses. The big difference is that HRAs are only available through an employer, and only your employer can make contributions. 

In contrast, an HSA belongs to you, and you, your employer or anyone else can make a contribution. Also, HSAs are portable, so you don’t have to worry about losing anything if you leave your company.

With an HRA, if you leave your employer, you lose access to that money because it never really belonged to you.

### What’s better, an HSA or an HRA?

Like most things in life, it depends. It depends on you and your needs. HRAs and HSAs also have different benefits for employers and employees.

If you’re an employer, advantages of an HRA include:
- Tax advantages.
- You can integrate them with FSAs.
- Better employee retention.

However, if you want to offer an HSA to your employees instead, your benefits include: 
- Tax advantages.
- Flexibility with how much you contribute.
- Less record keeping.
- Your workforce becomes more engaged with their health care and medical expenses.
- Lower expenses.

On the other side of the coin, if you’re an employee, the benefits of an HRA include:
- No need for an HDHP.
- It’s completely funded by your employer. 
- You have access to the funds from the first day of coverage.

However, if you choose an HSA instead, here are the advantages:
- Portability.
- Can invest the funds for retirement in mutual funds.
- You get all the tax benefits.
- 
### Are all high-deductible plans HSA eligible?

Not necessarily. They need to meet the requirements set by the IRS to qualify as a true HDHP, which is HSA-eligible. Also, true HDHPs will cover preventive care without requiring you to hit your deductible but offers no other benefits until you reach that point.

Also, it’s important to note that in order for you to be able to contribute to an HSA, you must also meet other requirements, including;
- You have coverage under the IRS’s definition of an HDHP on the first day of the last month of the year.
- You have no other health coverage, and you’re not enrolled in Medicare.
- Someone else isn’t claiming you as a dependent on their tax return.

### Can I have an HSA if my employer offers an HRA?

Yes, but only under very limited circumstances. Most general HRAs will make you ineligible for an HSA. But if your company offers a “limited purpose” HRA or a “post-deductible” HRA, then you may still be eligible for an HSA. Also, if your employer contributes to an HRA that you can only use when you retire, you may be eligible for an HSA.

A “limited purpose” HRA is one where you can only use it for dental, vision or preventative care. A “post-deductible” HRA is one where you can use it to pay for medical expenses after the IRS deductible is met.

### Can I contribute to an HSA without an HDHP?

No. But you can still spend the funds in your HSA or reimburse your medical expenses until the account is empty. 

### Can I have an HSA if my spouse has an HSA?

If your spouse has an individual health policy and no other form of health insurance, then you can get an HSA for yourself, as long as you meet all the other requirements. 

However, if your spouse uses a [health care FSA](https://livelyme.com/blog/what-is-a-healthcare-fsa/), then you wouldn’t be eligible. This is because your partner can also use their FSA funds to pay for your medical expenses. The devil’s in the details, though. If your spouse’s FSA is a limited purpose FSA (one that covers vision and dental only), then you can get an HSA.

### Can an HSA plan have copays?

Yes. The IRS defines copays as an out-of-pocket expense in an HSA-eligible HDHP. HDHPs have to have a [max out-of-pocket limit](https://www.healthcare.gov/glossary/high-deductible-health-plan/).

### Can HRA be used for premiums?

For most employers, the simple answer is no. HRAs were often used by employers to reimburse workers insurance premiums. But, that changed with the Affordable Care Act (ACA). Under the ACA, an HRA can no longer pay for health premiums. There are some exceptions, though.

For example, ACA market reforms do not apply to retirement HRAs and stand-alone. The first option is offered only to retirees, while the second is an HRA with only one plan member. Under these two specific HRAs, you can use them to reimburse health care premiums.

### Can HRA funds be rolled over to an HSA?

As of 2012, you can’t roll funds over from an HRA into an HSA.

### Can you contribute to an HSA without health insurance?

No. To contribute to an HSA, you must be on a qualified HDHP and not otherwise insured. A family member can contribute on behalf of other family members as long as they are eligible. But to be able to contribute to an HSA, you need to have an HDHP.

## How to work out what plan is best for you

When deciding which health plan to choose, you’ll want to take a thorough look at the following factors:
- Do you expect to visit the doctor often? 
- What is your risk tolerance? 
- Will you be able to afford an expensive medical bill if an unexpected event happens?
- How big of a network do you need?
- Can you max out an HSA every year?

Take a clear look at the math of the plans you’re weighing up. Sometimes even though the deductible for a traditional plan is lower, it doesn’t make financial sense if the employer contribution to the HSA in the HDHP plan is high. 

At the end of the day, no-one can tell you what plan is best for you. Only you know your unique situation and your risk tolerance. Consider speaking with a tax advisor to get personalized advice to help you make the choice that’s best for you.

Choosing the right health care plan for you hsa vs ppo

HSA or PPO? The good news is that you don’t have to pick, as long as you have a high-deductible plan in a PPO network.

HDHP HSA vs PPO Plans: Which is better for health insurance? 

What’s the Difference Between an HDHP with an HSA and a PPO?

When you have a medical expense there are two ways of paying. You can either 1) swipe your [Lively Visa debit card](https://www.benefitnews.com/news/lively-visa-partner-on-debit-processing-hsa) at the time of purchase, or 2) reimburse yourself later. 

What does it mean to “reimburse” yourself with your Health Savings Account (HSA)? It means paying out-of-pocket for an HSA-qualified medical expense and then using money from your HSA to pay yourself back. This can be done even if you don’t have money in the account the day the expense incurred, and at any time in the future. Whether you reimburse yourself now⁠—or later⁠—has some interesting benefits.

## Paid for a medical expense out-of-pocket? What’s next?

As long as the qualifying medical expense was made after the establishment of your HSA, you can [use your HSA to pay yourself back](https://livelyme.com/guides/hsa-guide/) for your out-of-pocket expense. And while it isn’t required that you submit receipts to be reimbursed from your HSA, we recommend it in case of an IRS audit. 

### Know what qualifies as an HSA-eligible medical expense

There are thousands of HSA qualified medical expenses. Expenses are likely pretty obvious if you’re at the doctor’s, having an eye exam, or at a dentist appointment. But what about over-the-counter products like sunscreen, prenatal vitamins, or contact lens cleaning solution? 

Use “[What’s Eligible](https://livelyme.com/whats-eligible/)” to find qualifying medical expenses without the requirement of a doctor’s note, with a prescription, or with a doctor’s letter. Better yet; let Lively’s Expense Scout do the searching for you.

### Expense Scout

Don’t spend your time scanning receipts trying to find your HSA-eligible medical expenses. 

Instead, use Lively’s [Expense Scout](https://livelyme.com/expense-scout/) to scan and alert you of potential HSA-eligible expenses from linked external accounts. Like your personal debit card or credit cards. Expense Scout prompts you to a list of expenses for review. Then you have the option to reject or submit them⁠—with receipt—for reimbursement, now or later.

## Document all medical expenses

![document-all-expenses](//images.ctfassets.net/6j8y907dne6i/4FopIwi9mrF1zEqiMZQpxi/aadc96e2bbe2ec9a3e7426a5a4f48b6d/document-all-expenses.jpg)

To justify spending money on a qualified medical expense, you should keep or track your expense receipts. Receipts should be kept for as long as your tax return is open and subject to an audit; usually three years. Or as long as your HSA is open. Whichever is longer.

Some HSA companies (like Lively) offer digital receipt filing so you can document your receipts without having to save piles of receipts. This is helpful if you plan on paying for out-of-pocket expenses and reimbursing yourself “20 years” from now. But, more on that hack in a bit. 

### Records to keep in case of an IRS audit 

It’s best to save a copy of your health insurance carrier’s Explanation of Benefits (EOB) in case the IRS audits you. This documents the expenses for services covered under your High-Deductible Health Plan (HDHP). You should also keep receipts for all products or services you paid for.

In case of an [IRS audit](https://www.irs.gov/forms-pubs/about-publication-969), you need to have records that prove:

- Distributions were to pay or reimburse qualified medical expenses,
- Qualified medical expenses had not been paid or reimbursed from another source, and
- The medical expenses had not been taken as an itemized deduction in any year. 

When you choose to be reimbursed for an eligible medical expense that’s called a __distribution__.

If you take a distribution your HSA provider will send you [Form 1099-SA](https://livelyme.com/what-is-irs-tax-form-1099-sa). You should be prepared to file [Form 8889](https://livelyme.com/blog/what-is-tax-form-8889/) with your annual taxes. If there’s something that doesn’t match between forms 1099-SA and 8889, resolve it before filing your taxes. Keep reading to learn how HSA distributions are taxed and reported.

## When can I reimburse myself for an out-of-pocket expense?

![when-hsa-reimbursement](//images.ctfassets.net/6j8y907dne6i/2DcikyDJz1nLL4z6MHOCy1/36828f85b62ccab059de8b6a9336d31b/when-hsa-reimbursement.jpg)

You can reimburse yourself __anytime__. 

Today, tomorrow, or 20 years from now. The only rule is that your HSA was established at the time that the expense was incurred (date of service). And that the expense was not reimbursed in any other way. 

This is one of the reasons why knowing the exact date of the establishment of your HSA is important. You cannot be reimbursed for expenses that were incurred prior to that date.

Did you know that you can also reimburse yourself for expenses even if you are no longer eligible to contribute to an HSA? That’s because the use of your funds is not tied to HSA eligibility. Once you add money to your HSA, it’s yours. And it can be used at any time in the future.

## Want more money in retirement? Reimburse yourself later

One of the major financial benefits of an HSA is that you can choose to reimburse yourself anytime. This gives you the opportunity to save the funds in your account. It also provides the opportunity to increase interest earned or provide more time for invested funds to grow.

Many people choose to pay for medical expenses out-of-pocket and reimburse themselves later. Since there’s no reimbursement deadline, you can choose to reimburse yourself years later. Even during retirement.

This requires you to save your receipts and invoices for reimbursement which can be guaranteed with the help of a secure [invoice management software](https://www.getyooz.com/blog/invoice-management-software). In the event that you ever get audited by the IRS, they will ask for proof. If you’re unable to provide those records, you would have to pay regular income tax plus a 20% penalty on your reimbursements.

## How HSA distributions are taxed and reported

![hsa-distribution-tax](//images.ctfassets.net/6j8y907dne6i/1Qp2iGiBLoBkr48xsxV81z/ad237aa0e2034eae881b12050d5fa8c8/hsa-distribution-tax.jpg)

If you use your HSA to buy a qualified medical expense, you will not have to pay income taxes on those funds. If you use your HSA for something other than a qualified medical expense, that distribution is taxable income. And you can be subject to a 20 percent penalty for early withdrawal. When an HSA account holder reaches the age of 65 or becomes disabled, they are no longer subjected to that 20 percent penalty.

In terms of reporting HSA tax information, the HSA trustee or custodian keeps all reports of distributions. The trustee then shares that information to the account owner through IRS Form 1099-SA. HSA account holders are responsible for reporting their own distributions to the IRS through Tax Form 8889. It’s recommended that HSA owners keep records of all their distributions, in the event, they ever become audited by the IRS.

## HSA reimbursement in action

### Real-life example: When your HSA is low in funds 

James recently got a new job and has a variety of health plans to choose from. He decides on a high-deductible health plan so that he can take advantage of his employer’s HSA contributions. Upon opening his account, he deposits a dollar to establish his account. 

A few weeks after opening his account, James gets into an accident and sprains his ankle. Since he doesn’t have those funds in his HSA yet, he pays for his treatment out-of-pocket. He saves his receipts with a digital receipt organizer, so he can reimburse himself later.

Fast forward to a year from then. James now has enough money in his HSA to pay himself back for those out-of-pocket expenses. Because he kept such diligent records, he was able to reimburse himself with his HSA.

He reports this information to the IRS using IRS Tax Form 8889. If James did not report his distribution to the IRS correctly, the money he withdrew could receive a 20% tax penalty. Since James saved his receipts, he won’t have to pay this penalty. And he receives the tax-free benefits from using his HSA for qualified medical expenses.

### Real-life example: Your savings strategy

![hsa-reimbursement-wealth-building](//images.ctfassets.net/6j8y907dne6i/6R7cjd9se6Xrgawi2jo8UB/6d65ef236dfdd131080e9af01ae762b8/hsa-reimbursement-wealth-building.jpg)

Juliet is a smart, money-savvy individual and she wants to get the most out of her HSA when she retires. She enrolls in an HDHP for several years and also maxes out her HSA every year. When she needs to pay for a health-related expense, she pays out-of-pocket. She tracks her health expenses by taking pictures of her receipts and logging them into Lively App to reimburse herself later.

Fast-forward to years from now when Juliet is in retirement. Since she hasn’t withdrawn any of the money in her HSA, she was able to earn more interest with her higher account balance. And even earned more through investing some of her funds. 

Juliet has diligently logged years’ worth of glasses, contacts, prescriptions, and other qualified health-related expenses into her account. Which, when added together totals thousands of dollars. She chooses this opportunity to finally reimburse herself for those expenses with her HSA. And uses those funds to help her travel during retirement.

## Reimbursing yourself for out-of-pocket medical expenses with Lively

Have a couple of out-of-pocket expenses that you can use your HSA for? Here’s how you can reimburse yourself through the [Lively app](https://livelyme.com/app/):

1. Access your Lively account through our online portal, iOS, or Android App.
2. Navigate to “Transactions” in the menu or click on “+ Expense.”
3. Choose “Add Expense: For purchases made using your personal fund.”
4. Enter the amount of the medical expense, who the merchant/provider was, and the date you made the purchase or started receiving service.
5. Choose “Get Reimbursed Later” or “Process Immediately.” 
6. Add a receipt by taking a photo or uploading an image.
7. Click the “Submit” button.

This process is quick and easy, and you’ll have those funds in your account within 2-3 business days. 

We suggest taking a picture of all of the receipts you have for your healthcare expenses so you can keep them attached to your transactions within your Lively account. Having your information ready to go makes using your HSA simple.


hsa-reimbursement-rules

Learn about HSA reimbursement rules: how to track expenses in case of an IRS audit, how distributions are taxed, and what is reimbursable under the rules.

HSA Reimbursement Rules: How to Get Reimbursed, and When  

What is Health Spending Account Reimbursement and How Does it Work?

What if I qualify for Medicare?

If you qualify for Medicare and have HSA questions our articles can help.

What if I am married or planning on getting married?

Here you will find HSA related articles regarding marriage and tax savings.

What if I am unemployed?

Currently unemployed? Find out how you can save on your taxes with these USA articles.

What if I am self-employed?

If you are self-employed in a high deductible health care plan (HDHP) read our articles on how HSA's can help save money on taxes.

What if I have or was offered job-based insurance?

Offered job-based insurance? Read our articles.

What if I just had a baby or adopted?

Whether you had a baby or adopted one our articles on HSA tax savings can help.

What if I had a baby or just adopted?

What if I am under 30?

If you are under 30 and have a high deductible health care plan find out how an HSA can save you money.

What if I have children?

Are you looking for HSA related articles regarding children? Take a look at what we have.

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