How to Choose the Right Health Savings Account
If you are in the process of looking for a health savings account (HSA), then you have already made one good decision by choosing to invest in an HSA in the first place. Now you want to make another good decision when it comes to choosing an HSA to meet your needs. The tips below provide guidelines for assessing the most important aspects of any HSA.
Consider the Deductible
Deductibles can range from $1,100 to $5,600 for individuals and from $2,200 to $11,200 for families. While most plans pay 100% of your health care costs after the deductible is met, you still have to meet the deductible and that is the case whether you start using the plan immediately after you purchase it or wait a few months. Determine how quickly you’ll be able to put aside the money for the deductible (put it into your HSA that is) and use that as a guide for determining if you can hold out for the higher deductible or need to go with a lower one.
Though a low deductible can seem immediately attractive, remember that higher deductible plans often provide greater coverage, more choice and other perks. If you can wait to use your plan, then you may be better off with the higher deductible. Remember, too that higher deductible plans are often less expensive on a monthly basis. It may be that the difference in monthly cost allows you to save enough to meet the deductible more easily, thus making the high-deductible plan more affordable over the long term.
Check Out the Provider Network
Like most insurance plans, HSAs often have preferred provider organizations or PPOs. If you know which doctors and hospitals you would prefer for treatment, then you’ll want to be sure that they are covered under the PPO network in your HSA. Though some costs may be covered outside of your PPO, it is likely that all of them will be and thus your out of pocket expenses will be higher if you go beyond your PPO. Choose wisely to ensure that you can see the doctor you want to see.
Make sure that your HSA will follow you no matter where you go. Some HSAs, even the private ones, are state-specific. If you know you’ll be moving or that there is a chance you might need to move, take that into consideration when choosing an HSA so that you don’t lose accumulated benefits. Even if you can’t take your policy with you, you may be able to convert it to a different policy without losing anything, so be sure to ask about this before making your purchase.
Consider a Small Accident Plan
Though HSAs cover catastrophic events, you may want to consider keeping a small accident plan, like those offered by HSAforAmerica.com for a year or two while building up the savings in your HSA. An accident plan will cover you, up to a few thousand dollars, and thus ensure that your HSA is not wiped out along with your personal savings if something catastrophic happens in the early years of your plan. Some accident plans cost less than $50 per month, so consider the benefits of a little extra coverage.
If you implement the tips above, or at least keep them in mind while you evaluate HSAs, you’ll be well on your way to making a great decision and protecting the health of your family. Remember that there are many HSA plans available and that the terms differ fairly drastically from one to the next. Be ready to do some math, comparing premiums and what you can add to your savings each month to determine if you will be better off with a high-deductible, low-premium plan or vice versa. Put in the time while choosing an HSA to avoid headaches when you need to use the coverage.
Ron Sheffer is a healthcare consultant. He often writes about his experiences and insights into smart navigation through the system.
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