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How are PPOs and HSAs related?

2 min read

30 sec brief

The complex world of healthcare and taxes never seems to get easier. Let us break down healthcare plans and health savings options (HSAs) to make it a little easier for you.

The complex world of healthcare and taxes never seems to get easier. Let us break down healthcare plans and health savings options (HSAs) to make it a little easier for you.

HSA-Eligible Plan

The most important question to answer is whether your healthcare plan is HSA eligible? Per the 2019 IRS guidelines HSA eligible plans are defined as:

  • Have deductibles of $1,350 or more for an individual and $2,700 for a family and there can be no copays or coinsurance prior to hitting those deductibles (no cost for preventative care).
  • Have an out-of-pocket maximum of $6,750 or less for an individual and $13,300 or less for a family.
These qualifications allow you to contribute as an individual or family to an HSA during your plan year. HSA contribution limits, as set by the IRS, are $3,500 for individuals and $7,000 for families for 2019.

There are many health plans that can qualify for these specifications including a PPO or HMO. However, an HSA eligible plan is commonly referred to as a high deductible health plan (HDHP). So if you see that in your employer’s benefits information, an HSA is likely to follow.

And remember, an HSA is not a healthcare plan but works in combination with an HSA eligible healthcare plan to create tripe-tax health savings.

Existing HSA

But wait! If you already have an HSA, from previous health plans and employers, you still have access to your HSA. It’s yours, just like a 401k or IRA! Don’t forget unlike an FSA, HSAs have no “use it or lose it policy.” As such if you switch to a non-eligible HSA plan, you still have access to your existing HSA to pay for qualified out-of-pocket medical expenses or let grow for years to come. You are, however, unable to actively contribute to that HSA.

You Own Your HSA

An HSA is yours. It goes with you from job to job, healthcare plan to healthcare plan, and HSA provider to HSA provider. We might suggest Lively, as it’s free for individuals. HSAs can be used in any of these circumstances noted above to pay for qualified out-of-pocket medical expenses or as a health saving vehicle for retirement. Eligibility only changes HSA contributions. Enjoy your HSA savings, your earned it!

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

About the author

Lively

We are HSA Experts! Lively is a Health Savings Account (HSA) platform for employers and individuals. A 401(k) for healthcare.

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