Why can't I add to my HSA with my new health insurance plan?

You can contribute to a health spending account—if you pick the right plan

Published: November 01, 2013 05:16 PM

Q. Our family just signed up for a plan on the Washington health insurance marketplace, Washington Healthplanfinder. The website says the plan is not Health Savings Account eligible, meaning we can't continue putting money into our HSA. Yet the deductible and out-of-pocket limits are within IRS guidelines. What's the story?  

A. For those who aren't familiar, Health Savings Accounts are accounts that you can create and fund in conjunction with high-deductible health plans. Money you put into an HSA is tax-free and you can draw on the account to pay out-of-pocket health care costs. The money in the HSA is yours to keep and use forever, even if you switch plans.

The plan you bought has a $5,000 individual and $10,000 family deductible, with an annual out-of-pocket limit of $6,350 for an individual and $12,700 for a family. Those do qualify for an HSA. But for a plan to be HSA elligible, it must not cover ANY health care costs (except preventive care) before the deductible is met. The plan you bought doesn't do this; it covers doctor visits with a copay before the deductible is met. That's why it's not HSA-eligible.

The Washington marketplace allows you to filter your options to show only HSA-eligible plans a. When I did that for your location, up popped plans from three different carriers that would allow you to continue funding your HSA.

Even if you can't put more money into your HSA this year, you continue to draw on it for medical expenses as before.

Got a question for our health insurance expert? Ask it here. It helps if you include the state you live in.

— Nancy Metcalf


Health reform countdown: We are doing an article a day on the new health care law until Jan. 1, 2014, when it takes full effect. (Read the previous posts in the series.) To get health insurance advice tailored to your situation, use our Health Law Helper, below.

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