What Is a High Deductable Health Plan?

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Definition of HDHP

A high deductible health plan as defined by the IRS is one that meets the following requirements for 2008 and later:

Limits	Self-only coverage	Family Coverage
Minimum annual deductible	$1,200	$2,400
Maximum annual out of pocket expenses*	$5,950	$11,900
Maximum annual contribution to HSA account	$3,050	$6,150
Catch up provision for 55 or older	$1000	$1000

*This limit does not apply to deductibles and expenses for out of network services if the plan uses a network of providers, instead, only deductibles and out of pocket expenses (such as co-payments and other amounts, but not premiums) for services within the network should be used to figure whether the limit is reached.

An HDHP has:

A higher annual deductible than typical health plans and,
A maximum limit on the sum of the annual deductible and out-of-pocket medical expenses that you must pay for covered expenses. Out-Of-Pocket expenses include co-payments and the amounts, but do not include premiums.

“An HDHP can provide preventive care and certain other benefits with no deductible or a deductible below the minimum annual deductible. For more details see Pub. 969. An HDHP does not include a pan if the substantially all of the coverage is for accidents, disability, dental care, vision care, or long-term care. An HDHP also cannot be insurance that you are permitted to have in addition to an HDHP.”

“An HDHP may provide preventive care benefits without a deductible or deductible below the minimum annual deductible. Preventive care includes, but is not limited to many common services like cancer screenings, annual physical, routine prenatal and well-child care, immunizations, etc.”

“An HSA requires that the account owner have health insurance coverage and the insurance must be a High Deductible Health Plan”

“You must have health insurance coverage when you set up an HSA. Therefore you must obtain coverage from a High Deductible Health Plan at the same time that you set up the HSA.“

CONTRIBUTIONS TO AN HSA [from Page 6 of IRS pub. 969]

“Contributions made by your employer are not included in your income. Contributions to an employee’s account by an employer using the amount of an employee’s salary reduction through a cafeteria plan are treated as employer contributions.

You can claim contributions you made or contributions made by nay other person, other than employer, on your behalf, as an adjustment to income.”

Reporting Contributions: Refer to Form 8889. “Report all contributions to your HSA on form 8889, Health Savings Account (HSAs), and file it with your form 1040. You should include all contributions made for 2007, including those made by April, 15, 2008, that are designated for 2007. Contributions made by your employer are also shown on the form.”

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