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HSA-compatible health plans

What if you had a savings account to help cover health care costs — and the dollars rolled over from year to year? What if the money you spent on health care could help you save on taxes? That’s the power of a health savings account (HSA) paired with an HSA-compatible health plan.

How does it work?

Health savings accounts

You can open an HSA to help pay for medical expenses. You may be able to get an HSA through your preferred bank or credit union. If you want to take advantage of an HSA, you need to be enrolled in an HSA-compatible health plan. If you already have an HSA, you can pair it with a UCare HSA-compatible plan.

HSA-compatible health plans

An HSA-compatible plan, sometimes called a high-deductible health plan, has a lower monthly premium and higher deductible than a copay plan. Because you will pay more out of pocket before you reach your deductible with this kind of plan, you can use an HSA to save money for medical expenses.

An HSA-compatible plan is available through UCare. You choose your network (broad or focused) and the level of coverage (silver or bronze) that works best for you. Just like the other UCare Individual & Family Plans, HSA-compatible health plans cover preventive care and cap your out-of-pocket expenses.

You aren’t required to open an HSA in order to enroll in an HSA-compatible plan, but it is a great option for saving money and paying for eligible medical expenses.

Save on taxes

  • You can deposit up to $3,850 each year tax free for an individual (Individuals 55 and over can contribute an extra $1,000 annually) or up to $7,750 for families
  • Withdrawals are tax free when funds are used for eligible medical expenses
  • Any interest you earn on your account is tax free

Is an HSA-compatible plan right for you?

This kind of health plan might be a good fit if you are generally healthy and don’t expect large health care expenses this year. It’s also a great option if you’re interested in actively managing your expenses and using your HSA as an investment tool.

If you think you and your family might need expensive health care in the next year, a copay plan may be a better option.


Never lose your HSA funds

Unlike a flexible spending account (FSA), you can keep funds you don’t use year after year. You can also invest the funds in your account and keep your earnings tax free. Talk to your financial planner or credit union rep about investing your HSA funds.

Once you enroll in Medicare, you can no longer contribute to an HSA. But you can continue to use the funds in your account to pay for qualified medical expenses. You can also use your HSA funds for other purposes after age 65, but you’ll pay income taxes for anything other than qualified medical expenses.


Note: This material is provided for general informational purposes only and should not be considered legal, tax or financial advice. You should consult with a lawyer, tax professional or other financial advisor to determine what may be best for your individual needs.