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By Lively | September 12, 2017

How are PPOs and HSAs related?

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 2017 IRS guidelines HSA eligible plans are defined as:

  • Have deductibles of $1,300 or more for an individual and $2,600 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 $6,550 or less for an individual and $13,100 or less for a family.
These qualifications allow you to contribute as an individual or family to an HSA during your plan year. 2017 HSA contribution limits, as set by the IRS, are $3,400 for individuals and $6,750 for families, in 2017.

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!

If you need more help with HSA decisions, check out our blog. We will make you a healthcare benefits expert in no time, without any extra work or effort on your end.